Health Insurers Vs. Hospitals-Patients Pay

So the health insurance companies have started tightening the screws on private hospitals in India.  The tussle between health care services providers and the health insurance companies have been on the cards for a while now. The sordid affair burst into the limelight last week, when India’s 4 largest general insurance companies, all owned by the government of India, refused cashless services to patients in these hospitals. The insurance companies can easily do this, by throwing out these hospitals from the network of hospitals, whose patients are entitled to this benefit. The fine print that you and I sign, while buying an insurance policy says that we are entitled to cashless services in select hospitals only and the insurance companies can change this network at their sweet will.

Well, for the uninitiated here is what the problem is. Health Insurance companies believe that hospitals overcharge patients who have an insurance cover simply because the money is to come from the insurance companies. Insurance companies for long have been asking hospitals to agree to fixed rates for some common procedures and surgeries. The hospitals have been resisting this as they believe that these rates are too low and in medicine, it is quite impossible to have fixed packages for surgical procedures etc. Large private sector hospitals, who offer high standards of medical care and pride themselves on their state of the art equipment, doctors, nurses etc. believe that at the rates offered by these PSU insurers, they will not be able to maintain their standards and lose money. Thus the impasse.

Now, here is the truth. The insurance companies by and large are right in accusing the private hospitals of overcharging patients who have an insurance cover. However, in many hospitals this is not deliberate. It is just that if a doctor is in doubt about ordering a test, he invariably would ask for the test, if the payor is not the patient but is an insurance company. This is largely because he wants to be sure of his diagnosis and reduce the risk of his clinical judgement being wrong. Now one may argue that the additional test, constitutes better healthcare and the doctor is well with in his right to ask for it and viewed from this perspective, this would hardly qualify as ‘overcharging’.

The other reason for inflated bills is that we as consumers do not feel the pinch even if the hospital bill is more than what we had thought it might be at the beginning of the hospitalisation. Since the insurance company is paying we would insist on top of the line stuff for ourselves. It hardly matters, whether we really need it or a cheaper option might have been just as effective, things that we would surely consider if we were paying out of our own pocket.  I recall when my father underwent a prostate surgery last year, we ran up a bill of close to Rs. 200000, which I thought was on the higher side. However, since we had insurance, I hardly felt the need to either question the doctor or the hospital. I believe, mostly this apathy of the hospital as well as the consumers towards insurance payouts inflates the bills.

Apart from inflated bills the insurance companies also believe that hospitals defraud them by manipulating patient histories and making claims on behalf of the patients, who would otherwise be ineligible for the claim. This mostly happens if a patient has a pre-existing condition (ordinarily not covered), which the hospital’s doctors would try to hide from the insurance companies. Well, there is a grain of truth in this as doctors occasionally do try to ‘help’ their patients. This is mostly on the request of patients, who desperately want to make a claim even when they know that they are not eligible. The doctors try to oblige their patients either because they have an existing relationship with the patient or when they fear that if they do not ‘help’ the patient he will go to another doctor, who will do the needful. Thus losing a patient for something like this makes little sense to them.

The insurance companies on the other hand are always looking at ways and means of denying hospitals claims, which are perfectly payable. They arbitrarily make deductions citing obscure and often questionable reasons. Many a times they release the hospital’s payments without even informing them that they have deducted part of the money. The payments are rarely made on time, the third-party administers (TPA’s) working for the insurance companies are given targets to reduce payouts to hospitals and the system is  hugely inefficient. Hospitals have to incur costs by hiring people, whose only job is to follow-up with the insurance companies and TPA’s about the money owed to them.

A summary cessation of cashless facilities in private sector hospitals is hardly the solution that works. The insurance companies need to work together with the hospitals to sort out their differences on a case to case basis. The hospital as well as the insurance companies must appoint reasonably experienced and mature people to manage these relationships, who should regularly meet and discuss all cases, where the insurance company feels that the hospital has overcharged. These cases should be thoroughly investigated and if a doctor is found complicit, he should be asked to explain. The insurance companies and the hospitals should organise training programs for the doctors, making them aware of how ‘helping’ patients helps no one. If the insurance company finds a hospital’s administration itself involved in shady practices than of course they must throw the hospital out of their network. On pricing, the insurance companies must accept that hospitals have a right to price their services as they deem fit. Most hospitals will price themselves according to the quality of their services, the pull of their brand and the existing market realities. The insurance companies must accept these prices and maybe they can ask for some discounts based on the volume of business they conduct with a particular hospital. Dictating prices to a hospital is bad policy as the hospital when squeezed hard will cut corners thus compromising on patient care.

Finally as consumers, it  also devolves on us to be more prudent about our healthcare spends in a hospital. We should be as careful with the insurance money as we would be with our own. If we don’t and the insurance companies keep bleeding we will either end up paying higher premiums or worse, will have no cashless services in spite of having an insurance cover.   

 

 

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Indian Healthcare 2010

Here is a list of 10 things one would like to see happen in healthcare services arena in India in the New Year.

1. Healthcare Service providers should move faster towards recognising the patient as a customer and focusing on delivering ‘Total Patient Care’. This would include better medical care as well as much superior levels of hospital services. Hospitals need to invest heavily in people and process improvements to achieve the goal of ‘Total Patient Care’.

2. Investment in the hospital brand. Most hospitals in India are chary of investing in the brand and whatever little marketing communication that happens is purely tactical, meant to drive traffic or communicate the commencement of a new service or the addition of another doctor. This must change. Hospitals must find a credible and differentiated positioning in the consumer’s mind and move quickly to occupy it.

3. Develop an information resource pool that allows patients and caregivers to check out the hospital services, compare doctor’s qualifications, training, specialisation and years of experience.

4. Focus on wellness rather than illnesses. Indian hospitals are mostly about sickness and ordinary folks dread visiting hospitals. It would be a lot better if our hospitals also incorporated wellness services and promoted them aggressively. Prevention and community medicine should become critical areas of focus.

5. Develop sustainable and high quality outreach programs by seeking local community participation. I live next doors to Indraprastha Apollo Hospitals in New Delhi and I often wonder, wouldn’t it be great if this hospital ran a community health program in our area. The local community can offer space for the hospital to run and manage a small clinic with a round the clock nursing coverage and doctors (family physicians and specialists) visiting for a couple of hours everyday. Imagine, all major hospitals running maybe 5 such clinics in areas abutting them. The hospitals will not only get more patients, they will earn tremendous goodwill of the local community.

6. Use social media to create patient communities and facilitate constant exchange of thoughts and ideas. Let medical experts join in to provide guidance and keep the community interactions at an even keel. We had tried something like this at Artemis Health Institute in Gurgaon. Unfortunately it fizzled out once I moved on. More hospitals need to remain connected with their patients in a meaningful manner, even when they do not need the hospital. It is an investment in a relationship, which will pay dividends in the long term.

7. Improve Emergency services. I recall calling Apollo Hospitals once to rush an ambulance to my residence to pick up my wife who had accidently hurt herself and was bleeding profusely. I explained that I was at work and was on my way as well. I reached home before the ambulance and brought my wife to the Emergency in my car. The ambulance never reached my place because the Emergency services at the hospital kept calling my wife at our home landline phone to confirm whether she was really hurt!!!

8. Government run hospitals treating the poor are models of sloth, inefficiency and corruption. It would be great if private enterprise forges some kind of a win-win partnership with these hospitals and improves services. I am sure the savings from reducing crippling systemic inefficiencies will itself ensure decent profits for the private healthcare enterprises. The government must take initiatives in inviting a few carefully selected private healthcare organisations to participate in this experiment.

9. Health Insurance must penetrate deeper and wider. The claims processing should become less cumbersome. In this age of instant communication, hospitals and insurance companies manually fax documents, seek patient histories and look for loop holes to wriggle out of paying claims. This must end. Insurance companies and hospitals must connect with each other seamlessly and exchange information that helps patients get better service.

10. Rural and semi urban India must get its due share in the development of healthcare infrastructure. The government must encourage investments in primary and secondary care  in these areas. Unless we have more and more people accessing reasonably good quality healthcare services close to where they live, the India growth story will remain a big sham.

Here is wishing everyone a happy and healthy 2010.

Pic courtesy http://www.muhealth.org

Should Healthcare be free in India?

AIIMSYesterday morning I was billeted in a training session on Edward de Bono’s Six Thinking Hats and the power of parallel thinking. Out of the blue the trainer  asked the group to discuss the topic ‘Should Healthcare be free in India? The group that discussed this had well educated professional managers and senior executives. However none of them had a background in healthcare services per se.

Many people in this group felt that healthcare services should indeed be free in the country, pretty much like roads. Those with a a legal view supported this argument by pointing out that our constitution guarantees the right to life as a fundamental right and healthcare services can not be divorced from the right to life. A gentleman in the group gave the example of NHS in the UK and said that inspite of problems, it works. Many felt that in the face abject poverty in many parts of the country, it is only right that people have access to good quality healthcare at the expense of the government.     Continue reading

Why we do not need ‘Claim Ref’?

health-insurance1A few days ago The Hindustan Times in New Delhi reported that the global acturial company Milliman has ‘launched ‘claims processing guidelines’ that enables a third party administrator (TPA) or insurer to determine the severity of a patient’s condition and identify if the length of hospital stay investigations, consumables and treatment procedures are more than what is typically required’. 

The product reportedly called ‘Claim Ref’ can apparently be linked to a software, which allows it to compare a claim made by a hospital, with a ‘typically’ similar case taken out from a database containing information about 125 procedures gathered from Indian hospitals. This simply means that the insurance companies can hold back payments to the hospitals if the claim amount is in excess of what ‘Claim Ref’ indicates.

I am hugely skeptical of such arithmetic modelling for the following reasons.   Continue reading

The Ills of Health Insurance

health-insurance-ills I have been reading posts on what ails the American  Healthcare System and how the president elect Barack  Obama wishes to attempt to fix the problems on a high  priority basis.

The more I read the more I am realising that the American Healthcare System has been crippled by an health insurance system, which has grown to an extent, where it interferes with the delivery of care. 

Health Insurance Companies need to make profits to remain afloat. The only way they can do it is by ensuring that the premiums they collect are more than the claims that they pay out. Thus, to ensure profits they have to ensure high premiums (as high as the market can bear) and try and limit claims as far as possible.   Continue reading

The Marketing of a Hospital

Before I get into the business of writing about the Marketing of a Hospital in India I must establish my credentials.

I have been working in the arena of Marketing of Heathcare Services for the last 8 years or so. I have been involved with Apollo Health and Lifestyle Ltd., which is the franchisor of Apollo Clinics part of the Apollo Hospitals Group, headed the Marketing and later the Corporate and International Sales for Max Healthcare a large healthcare services company based in Delhi and for the last two years have been heading the Sales and Marketing function at Artemis Health Institute, a tertiary care hospital based in Gurgaon and promoted by the Apollo Tyres group.

When I started working for Apollo Hospitals as the Marketing Manager for The Apollo Clinics and later at Max Healthcare I was often asked the question as to what really a Marketing person did in a hospital. Marketing of hospitals was understood to be a big no no. If you had a good hospital infrastructure and some well known doctors working for you the conventional wisdom dictated that the patients will follow.   Continue reading