A low level of insurance penetration is a key challenge. Insurance firms must think past their traditional role of care delivery and opt for tech solutions
With a dismally low Government spending on healthcare and a health insurance penetration of just three to four per cent, India has one of the highest out-of-pocket spending rates. Thanks to the Government’s ambitious ‘Ayushman Bharat’ scheme, as many as 10 crore poor families are being brought under a basic medical security net. However, this still leaves a large number of Indians without any medical cover. According to a study by the Public Health Foundation of India, healthcare expenditure pushed about 55 million Indians into poverty in a single year. Even among the burgeoning middle class, for whom a health insurance policy is a good investment, very few of them understand the value of a good insurance plan that pays for preventive care. The Economic Survey 2019 said that health insurance plans need to be simplified to make it easier for individuals to buy them. Most consumers want value for money and if they are paying premium for insurance coverage that they don’t actually use, they tend to drop it. They fail to understand that this only increases their expenses down the line.
Escalating burden of non-communicable diseases: Lifestyle changes, increasing urbanisation and a longer life expectancy have led to a rise in the disease burden of non-communicable diseases (NCDs) like hypertension, diabetes, anxiety, depression and cardio-vascular disorders. Incidence of various types of cancers has also gone up in recent years with environmental pollution, obesity, unhealthy lifestyles and rising life expectancy believed to be major contributors. These chronic diseases put a major dent on the patients’ health and finances and often require hospitalisation with hefty expenditure. The PHFI study found that NCDs accounted for the largest chunk of spending by households. The study also concluded that cancer had the highest probability of resulting in such a “catastrophic expenditure.” With NCDs expected to rise further, the need for medical insurance cannot be underlined any more. There is a strong need to educate customers about the need for preventive care.
More awareness on health insurance: Although health insurance penetration has grown in recent years, its pace has been sluggish. The rolling out of the Ayushman Bharat programme has helped generate a lot of debate on the subject of health insurance, which is a good sign, particularly in rural areas where penetration of health insurance has been specifically low. There is an emergent need to create more awareness through campaigns and messages that seek to explain the utility of health insurance and simplify it for the common man to fill the gap in awareness. Such campaigns have to come both from the Government as well as the industry. The insurance industry must work proactively to spread the right knowledge about the many schemes and help the common masses understand the nuances and benefits of buying health insurance.
Innovation holds the key: Since there are a high number of uninsured people in India and Government spending on health insurance and healthcare is limited, private players must adopt innovative solutions that encourage people to buy health insurance and make them understand the value of preventive care. Let us look at some ways in which insurance companies can incentivise the purchase of a good insurance plan and promote healthy lifestyle habits.
Innovative insurance packages: Firms that are looking to enter the health insurance market should consider offering packages for the extended family. Not only will this help them widen their customer base, it is also a more sustainable option for the insurance provider in the long run. Similarly, insurance services in India have major gaps. Prominent among them is the paucity of packages covering OPD and medicine costs. Notably, OPD and medicine expenditure amount for a bulk of healthcare expenditure and people find it abrupt to buy insurance that will not cover any part of this expenditure. Providers must, therefore, devise innovative and new packages outside hospitalisation cover for the needs of diverse people.
Incentivising wellness: A lot of new players have started to link insurance programmes with smart phone apps that monitor the vitals and physical activity of their clients. The ones who work out on a regular basis are given a monthly reimbursement. Digital technology can be used to educate and engage customers.
Create a network to promote preventive care: Insurance providers should create a network of hospitals, pharmacies and clinics to educate customers about preventive care and encourage them to take preventive steps that would keep them from getting hospitalized. A smart phone app can be used to help them with continuous health monitoring and follow a healthy regimen so that they spend less money as outpatients. If we are to achieve Universal health Coverage by 2030, health promotion and preventive care should be given as much importance as treatment, palliative care and rehabilitation.
(The writer is Managing Director of a leading healthcare firm)