MUMBAI: The Insurance Regulatory and Development Authority (IRDA) Chairman on Tuesday said that low consumer awareness and insufficient healthcare infrastructure are the major hindrances to widen the reach of healthcare insurance in India.
“Even if there is a marginal increase in the type of healthcare insurance services, we will find our physical capacities insufficient. Therefore, there is an urgent need to build alternative systems to take care of the deficit in healthcare infrastructure,” stressed J. Hari Narayan, Chairman, IRDA, at the Health Insurance Summit 2008 organised by the Confederation of Indian Industry (CII) here.
Mr. Narayan emphasised on building up investment in infrastructure and adequate training along with focus on improving the traditional systems of government and public hospitals.
“In order to cover larger proportion of the Indian population, it is requisite that we encourage the public private partnership mode,” advocated the IRDA Chairman. Mr. Narayan also stressed the importance of developing new and simple insurance products, where majority of the policy could be on the Internet and further recommended that insurance policies be also explained in vernacular languages to reach the masses.
“Requiring the third-party administrators (TPAs) to build their IT systems and infrastructure for speedier claim processes, encouraging insurers to make their systems robust and embarking on wide consumer awareness programmes are the various measures undertaken by IRDA towards the growth of the health insurance in India,” said Mr. Narayan.
“It is time to take major steps in bringing good health to all people,” said Prathap C. Reddy Chairman, CII National Healthcare Council & Chairman Apollo Hospitals Group, through video conferencing at the CII Summit. While commending the model followed by the Andhra Pradesh Government in making healthcare reach the masses, he said measures should be taken to make such a model sustainable with appropriate contribution by consumers, providers and insurers.
Regarding consumer awareness as a major challenge for the healthcare insurance in India, Dr. Reddy stressed on the importance of making health insurance a way of life by spreading consumer awareness rather than through the use of compulsive methods.
The CII-KPMG report on ‘Health Insurance Inc. — the road ahead’ was released at the summit. The report gives an outlook of the healthcare insurance industry with emphasis on the challenges and growth enablers.
“We want companies to establish their own internal systems for grievances and complaint redress and make them very robust,” Mr. Narayan said. If the policyholder is not getting good service from insurance companies, he can approach the ombudsmen and seek redress, he said. There are 12 ombudsmen in the country.
The Chairman expects the ‘terror pool’ of insurance products to widen as ‘we go along’. “So far no claims have been filed. I expect certain claims would be (made). And we will know whether the current pool is sufficient or not only after those claims are filed,” he said.
The regulator is working on a database for health and motor transport insurance. It should be operational by the end of this financial year, Mr. Narayan said, adding that “the database will be available for examination by insurance companies”.
According to estimates, the total healthcare cost in the country is Rs. 1,70,000 crore per annum. Of this, Rs. 1,00,000 crore is through outpatient treatment and the balance is through hospital-billing.
Of the Rs. 70,000 crore, only 5 per cent payout is through insurance companies. “It has to go up to 20 per cent,” Mr. Narayan said.