PREMIUM PRODUCTS – Health Insurance : Ivan Chak, Head, Life Profit Centre and Accident & Health division, Tata AIG Life Insurance Company Ltd.

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According to a recent study by the National Insurance Academy (NIA) the health insurance cover in India stands at a meager 1.08%. Does it give a perception of opportunity or does it indicate a daunting business challenge necessitating a paradigm shift in public perception?

The health care market in India offers a tremendous opportunity for health insurance both in the rural and urban areas. A large proportion of the population is still unable to access quality health care, therefore, it gives us the opportunity to provide affordable, accessible, available and quality care to the population. We can provide these facilities by:

  • Creating awareness of the importance of health insurance and providing adequate information and education of the product to the masses.
  • Providing products that are cost effective and fulfill the needs of the individual.
  • Creating innovative Channels of distribution.
  • Providing good quality services thereby building the faith of the consumers.
  • Providing simplified products and Claim services.

What has been the strategy of major health insurance players such as Tata-AIG Life to benefit from this enormous untapped potential?

Tata AIG Life was the pioneer in launching the first health product in the country way back in 2003. We have recently got an IRDA approval for a critical illness return of premium product.

  • We are now going to introduce products targeting the masses and in particular, specific niches like women, children and elderly citizens. The aim of products should be to help individuals maintain their lifestyles come what may.
  • As per the McKinsey report, the health care spending will be primarily on lifestyle diseases, especially cancer, cardiovascular diseases, diabetes and chronic respiratory diseases. Products based on lifestyle diseases will be introduced in the market.
  • Introduction of innovative products offering a right mix of flexibility/ risk / return depending which will suit the appetite of the customers.

What public policy interventions would you recommend for popularising health insurance in India? How differently would you deal with the rural and urban Indian market?

Widely perceived to be inequitable, expensive, over indulgent in clinical procedures, and without standards of quality, the private sector is also seen to be easily accessible, better managed and more efficient than its public counterpart.

Given the overwhelming presence of private sector in health, there is a need to regulate and involve the private sector in an appropriate public-private mix for providing comprehensive and universal primary health care to all.

“Hospital Gradation Scheme is one of the schemes that IMA has announced as a very positive and pro-active scheme, which will help improve the healthcare delivery system of the country”

There has to be a differentiation in product coverage and pricing based on Urban and Rural locations. For the Rural market, the need is an affordable product, offering basic coverages along with quality care. The Urban market demands augmented services besides just getting quality core product/services.

Health insurers have been rallying for hospitals and nursing homes to be graded so as to reduce the high claims ratio on the risk covers they sell. What is your comment on this particular need of the industry and what are the predictive business benefits of such a grading system?

There is a massive difference in private spending on health care services between different states in different levels of hospitals. It is to be noted that in India, nearly eighty per cent of the healthcare delivery system is handled by the private sector and the rest by government. Hospital Gradation Scheme is one of the schemes that IMA has announced as a very positive and pro-active scheme, which will help improve the healthcare delivery system of the country in the long run, and bring forth a considerable degree of transparency in the working of the medical profession. There will be specifications on technology, manpower availability in the hospital and related medical services like X-ray, diagnostic laboratory, hospital infection control, biomedical waste management, etc. Standardised procedures and pricing among different levels of hospital will help us in having a benchmark for Claims processing throughout the country.

What is your view on a possible national policy mandating data-sharing among healthcare providers, payers and TPAs, perhaps something on the lines of HIPAA in the US?

State governmental health agencies collect and maintain a wealth of data to help them identify health problems, develop and evaluate interventions, and make decisions about purchase or delivery of health services. By linking and sharing data among the healthcare providers we will be able to move beyond traditional ways of looking at health services and develop an understanding of how each of us can play an important role in improving and assuring the public

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