Anuj Gulati, CEO, Religare Health Insurance Company, talks to Healthpost about the rising cost of healthcare in India and how hospitals and insurance companies should work together to bring down the cost of treatment.
 

Why do you think a majority of Indians do not have health insurance?
Indians spend around 5 lakh crore rupees on healthcare every year. One-fifth of it -- 1 lakh crore -- comes from various government and private health insurance plans. Still, there is a huge financing  gap of 4 lakh rupees that needs to be filled.

I feel people are aware that healthcare is expensive, and so insurance is important. But it is up to insurance companies to come up with value-for-money health insurance plans and a viable distribution mechanism for people.

As we live longer, we face more illness-- cataract, cardiac diseases, cancer are common among  people above 60. Only when people go to a hospital for treatment, they realise they should have bought buy a health insurance, but later they forget about it. We need to reach out to them.  

What do you mean by viable distribution mechanism?
On an average, premium collected per person per year is 3000 rupees. An agent gets 15 percent of it-- that is 450 rupees per scheme. It doesn't make it a good career option for young people. It restricts our reach. There is a need to develop a fast, technology-based  distribution system so that we can reach maximum people directly and through agents in a cost-effective way.

People feel that insurance has increased the cost of healthcare. They feel that hospitals perform unnecessary tests  and procedures to exhaust their insurance limit. What do you think?
Thirteen years back when I joined this industry, insurance used to constitute 3-5 per cent of the total billing of a hospital, now it is 25-30 per cent. As insurance penetration is increasing, insurance companies are working with hospitals to ensure that the cost of the treatment is controlled. And I must say that in most cases hospital do offer better packages to insured patients.

Unfortunately, there are some cases where hospitals do cheat people and we are aware of it. But it is not widespread. 

In fact, I have seen a revolution taking place in some parts of the country because of better insurance plans. In some villages and smaller towns of eastern UP, there were no health facilities till some years back. When the government announced a few insurance programmes for people, I saw many doctors moving to these towns and opening hospitals there.

A lot of people feel that health insurance is becoming costlier?
It is because the overall cost of healthcare is increasing. Insurance companies create a common pool of money they collect as premium and pay for people's treatment using it.
In fact, till date insurance companies have been increasing their premium every two-three years, soon it may have to be increased every year.  

So, the government or CSR programmes should take responsibility of a section of people-- the underprivileged, senior citizens and others-- who are unable to afford the premium.

What process do you follow while dispersing people's insurance claims?
In February 2013, The Insurance Regulatory and Development Authority (IRDA) came up with regulations for insurance companies. No insurance company can deny a claim, but there are certain exceptions.

Some elective procedures such as cataract, joint replacements, etc are not covered in the first two years of policy. And some pre-existing conditions such as blood pressure, diabetes, etc are not covered  for the first four years. That apart, we cannot deny any  claim.

How much insurance cover do you think is enough for a family?
Well, it depends on a couple of things. If you live in metros and visit a corporate hospital for all your health needs, the cost of healthcare goes up. An insurance cover of Rs 10 lakh for a family is good enough while in smaller towns, a Rs 5 lakh cover is sufficient in most cases.

What does India need to do to reduce the overall cost of healthcare?
We need to develop a system that can be a combination of the US and the UK healthcare systems. The economically weaker sections of society needs support from the government. The public healthcare system should be strengthened with skilled doctors and proper medical  infrastructure.

Private health insurance--by self or by employer-- should take care of the rest. 

Other means such as day care surgeries can bring down the cost of treatment drastically. Insurance companies too are realising their importance and are accommodating more and more day care procedures into their insurance plans.

Set treatment protocols and guidelines on hospital admissions may also help a great deal. For example, the World Health Organisation has come up with dengue guidelines for hospitals stating that they should not admit a patient until the platelet count comes down to a certain number.

No-frills multi-speciality centres are another good way to cut healthcare cost. These centres have all essential amenities but are not luxurious like corporate hospitals.