119767972 health insurance

8/12/2019 119767972 Health Insurance

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Health Insurance

The sections are as follows:-1. History of Healthcare & the evolution of Health Insurance {Introduction}2. The Health Insurance initiatives of the State in the last 6 years

!. The current Health Insurance scenario "#enetration$%. The a#s & i'#rove'ents area in Health Insurance(. The )uture o##ortunities in this sector in India

Introduction

The *n+lish word ,health, co'es fro' the ld *n+lish word hale 'eanin+,wholeness a /ein+ whole sound or well0.t the ti'e of the creation of the orld Health r+ani3ation "H$ in 14%5healthwasdefined as /ein+ ,a state of co'#lete #hysical 'ental and social well-/ein+and not 'erely the a/sence of disease or infir'ity,

The ter' health insurance is +enerally used to descri/e a for' ofinsurance that #ays for 'edical e#enses. It is so'eti'es used 'ore/roadly to include insurance coverin+ disa/ility or lon+ ter' nursin+ orcustodial care needs. It 'ay /e #rovided throu+h a +overn'ent-s#onsored social insurance #ro+ra' or fro' #rivate insuranceco'#anies.

)or an individual either at a #ersonal level or the fa'ily front of which he or she isa #art health is an etre'ely i'#ortant su/7ect which needs to /e +iven #riority.The sa'e conce#t can /e etended to the level of the country where the health ofthe citi3ens co'es at the core for its lon+ ter' sustaina/le develo#'ent.


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The history of the concept Health insurance can be traced back to the year 1883-84, when in Germany, compulsory accident and sickness insurance wasinitiated by Otto on !ismarck. The sa'e conce#t was also ado#ted /y reat8ritain )rance 9hile the Soviet nion and other nations after orld ar I.

In the year 14%6 in 8ritain the ;ational Health Insurance which went into effectin 14%5 #rovided the 'ost co'#rehensive co'#ulsory 'edical care #lan. Inwhich individual o/tained free 'edical attention /y #artici#atin+ doctors of;ational Health Service. The cost was 'et /y the national +overn'ent and localtaation & no'inal char+es for so'e services were levied. Si'ilarly 14(5 the9anadian Hos#ital and


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In 14%@ the Bhore C o mmittee R e port atte'#ted to analy3e the state of health carein"ndia and to 'a=e reco''endations for the i'#rove'ent of health care services in

"ndia# n the eve of IndiaDs inde#endence in 1$4% the 8hore 9o''ittee Be#ort /eca'ethe te'#late for the structure of health care services in"ndia in the #ostcolonial era asreflected in the #ostcolonial +overn'ent of IndiaDs )ive-Eear Alans.

The +overn'ent initiative was not enou+h to 'eet the de'ands fro' a +rowin+#o#ulation /e it in #ri'ary secondary or tertiary health care. lternate sources offinance were critical for the sustaina/ility of the health sector.

We need to understand the various methods that are used by individuals &families in financing the overall health care expenditure /efore we +o intofurther details re+ardin+ the various initiatives of state & society.

There is a /asic structure & #rocess as to how >Healthcare *#enditure? is financed /y#eo#le in India. I a' #rovidin+ /elow a flowchart hi+hli+htin+ the various o#tionsunderta=en to finance their health care e#ense.

There are 'ainly 2 ways /y way of which health care e#ense can /e tac=led. Itcan either /e done >privately "i.e. #rocure the 'oney #ersonally$ or with thehel# #f >State or Society/public.

In case of Arivate financin+ there are ! o#tions availa/le with any #erson whichare under-'entioned:-

ut of Aoc=et F Self financin+. I.e. the #erson #ays fro' his or her own#oc=et & savin+s.

Arivate Health Insurance F The e#ense is ta=en care /y the health #olicywhich the #erson owns.

*ternal Source F 8y way of 'ana+in+ #ersonal loans fro' friends &fa'ily or 8an=s etc

In the case of Au/lic )inancin+ o#tion the #erson a+ain has ! o#tions under-'entioned:-

State )unded F The ovt. #rovides for the 'edical care or +ives so'esu/sidy.

Social security F In develo#ed countries /y #ayin+ a s'all a'ount to thestate you are covered for 'edical.

*ternal funded F id or +rants etc

Till a/out 2 years /ac= the #rivate sectors venture in the health care sectorconsisted of only solo #ractitioners s'all hos#itals and nursin+ ho'es. TheGuality of service #rovided was ecellent es#ecially in the hos#itals run /ycharita/le trusts and reli+ious foundations.

In 145Ds reali3in+ that the +overn'ent on its own would not /e a/le to #rovidefor health care the +overn'ent allowed the entry of #rivate sector to reduce the+a# /etween su##ly and de'and for healthcare. The #rivate hos#itals are'ana+ed /y cor#orate non-#rofit or charita/le or+ani3ations. The esta/lish'ent

of #rivate sector has resulted in the e'er+ence of o##ortunities in ter's of


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'edical eGui#'ent infor'ation technolo+y in health services 8ATele'edicine and 'edical touris'

he current !ealth "nsurance scenario

India s#ends a/out 6.( to @C of


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8ut there are so'e s#ecial insurance sche'es #ro'oted /y the overn'entwhich #rovide 'edical /enefits to s#ecific sections of our society.

The under-'entioned initiatives & sche'es are those which have /een #ro'oted/y the overn'ent or with the hel# of the overn'ent.

Central Government Health Scheme (CGHS)

Started in 14(% with 16 allo#athic dis#ensaries coverin+ 2.! lac/eneficiaries

Arovides co'#rehensive 'edical care to central +ovt. e'#loyees

utual advanta+e to /oth e'#loyee and e'#loyer

;ow !2 dis#ensarieshos#itals in various syste's of 'edicines coverin+%2.@6 lac /eneficiaries

Since 14(% all e'#loyees of the 9entral overn'ent "#resent and retired$J so'eautono'ous and se'i-+overn'ent or+ani3ations As 7ud+es freedo' fi+hters and7ournalists are covered under the 9entral overn'ent Health Sche'e "9HS$. Thissche'e was desi+ned to re#lace the cu'/erso'e and e#ensive syste' ofrei'/urse'ents &GO", 1$$4'#

It ai's at #rovidin+ co'#rehensive 'edical care to the 9entral overn'ente'#loyees and the /enefits offered include all out#atient facilities and #reventiveand #ro'otive care in dis#ensaries. In#atient facilities in +overn'ent hos#itals anda##roved #rivate hos#itals are also covered. This sche'e is 'ainly funded throu+h9entral overn'ent funds with #re'iu's ran+in+ fro' Bs 1( to Bs 1( #er 'onth/ased on salary scales.The covera+e of this sche'e has +rown su/stantially with #rovision for the non-allo#athic syste's of 'edicine as well as for allo#athy. 8eneficiaries at this 'o'entare around %!2 s#read across 22 cities.

The 9HS has /een critici3ed fro' the #oint of view of Guality and accessi/ility.Su/scri/ers have co'#lained of hi+h out-of-#oc=et e#enses due to slow

rei'/urse'ent and inco'#lete covera+e for #rivate health care "as only 5C of costis rei'/ursed if referral is 'ade to #rivate facility when such facilities are notavaila/le with the 9HS$.

Employee and State Insurance Scheme (ESIS)

The enact'ent of the *'#loyees State Insurance ct in 14%5 led to for'ulationof the *'#loyees State Insurance Sche'e. This sche'e #rovides #rotection to


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e'#loyees a+ainst loss of wa+es due to ina/ility to wor= due to sic=ness'aternity disa/ility and death due to e'#loy'ent in7ury. It offers 'edical andcash /enefits #reventive and #ro'otive care and health education. edical careis also #rovided to e'#loyees and their fa'ily 'e'/ers without fee for service.ri+inally the *SIS sche'e covered all #ower-usin+ non-seasonal factories

e'#loyin+ 1 or 'ore #eo#le. Kater it was etended to cover e'#loyees wor=in+in all non-#ower usin+ factories with 2 or 'ore #ersons. hile #ersons wor=in+in 'ines and #lantations or an or+ani3ation offerin+ health /enefits as +ood as or/etter than *SIS are s#ecifically ecluded. Service esta/lish'ents li=e sho#shotels restaurants cine'a houses and road trans#ort and news #a#ers #rintin+are now covered. The 'onthly wa+e li'it for enrol'ent in the *SIS is Bs. 6 (with a #re#ay'ent contri/ution in the for' of a #ayroll ta of 1.@(C /ye'#loyees %.@(C of e'#loyeesD wa+es to /e #aid /y the e'#loyers and 12.(C ofthe total e#enses are /orne /y the state +overn'ents.

The nu'/er of /eneficiaries is over !! 'illion s#read over 62 *SI centers across states.nder the *SIS there were 12( hos#itals %2 annees and 1 %( dis#ensaries with over

2! /eds facilities. The sche'e is 'ana+ed and financed /y the *'#loyees StateInsurance 9or#oration "a #u/lic underta=in+$ throu+h the state +overn'ents with totale#enditure of Bs ! ! 'illion or Bs %- #er ca#ita insured #erson. The *SIS#ro+ra''e has attracted considera/le criticis'. re#ort /ased on #atient surveysconducted in u7arat &(hariff, 1$$4 as )uoted in *llis + et a,' found that over halfof those covered did not see= care fro' *SIS facilities.

nsatisfactory nature of *SIS services low Guality dru+s lon+ waitin+ #eriods i'#udent/ehaviour of #ersonnel lac= of interest or low interest on #art of e'#loyees and lowawareness of *SI #rocedures were so'e of the reasons cited


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ther overn'ent Initiatives

Apart from the government-run schemes, social security benefits for the disadvantagedgroups can be availed of, under the provisions of the Maternity Benefit (Amendment) Act

1995, or!men"s #ompensation (Amendment) Act 19$%, &lantation 'abour Act 1951,Mine Mines 'abour elfare und Act 19%, Beedi or!ers elfare und Act 19* andBuilding and other #onstruction or!ers (+egulation of mployment and #onditions ofervice) Act, 199.

/he 0overnment of ndia has also underta!en initiatives to address issues relating toaccess to public health systems especially for the vulnerable sections of the society. /he2ational 3ealth &olicy 44 ac!no6ledges this and aims to evolve a policy structure,6hich reduces such ine7uities and allo6s the disadvantaged sections of the population afairer access to public health services.

nsuring more e7uitable access to health services across the social and geographical

e8panse of the country is the main obective of the policy. t also see!s to increase theaggregate public health investment through increased contribution from the #entral as6ell as state governments and encourages the setting up of private insuranceinstruments for increasing the scope of coverage of the secondary and tertiary sectorunder private health insurance pac!ages.

/he government envisages an increase in health e8penditure as a : of 0;& frome8isting .9: to 4. : by 41 and an increase in the share of central grants from thee8isting 15: to constitute at least 45: of total public health spending by 41. /hetate government spending for health in turn 6ould increase from 5.5: to *: of thebudget by 45, to be further increased to $: by 41.

Health insurance initiatives by State Governmentsn the recent past, various state governments have begun health insurance initiatives.or instance, the Andhra &radesh government is implementing the Aarogya Rakshacheme since 4, 6ith a vie6 to increase the utili


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availability of services re7uires certification from the hospital ;ean or ;irector 3ealthervices. /he overall limit is +s > for the insured person for a period of one year.

A pilot proect on health insurance 6as launched by the Governme n t of Karnatakaand the ?2;& in t6o bloc!s since @ctober 44. /he aim of the proect 6as to developand test a model of community health financing suited for rural community, thereby

increasing the access to medical care of the poor. /he beneficiaries include the entirepopulation of these bloc!s./he premium is +s > per person per year, 6ith the 0overnment of arnata!asubsidi


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e'#loyee. It is esti'ated that a/out 2 'illion e'#loyees 'ay /e covered /ysuch rei'/urse'ent arran+e'ents

Mediclaim bein one o! the oldest " most popular health insuranceplans# a brie! summary o! its development# success " aps is

provided belo$%-History o! Mediclaim scheme

The +overn'ent insurance co'#anies started first health insurance in 1456under the na'e ediclai'J thereafter ediclai' has /een revised to 'a=e itattractive #roduct. ediclai' is a rei'/urse'ent /ase insurance forhos#itali3ation. It does not cover out#atient treat'ents. )irst there is used to /ecate+ory-wise ceilin+s on ite's such as 'edicine roo' char+es o#erationchar+es etc. and later when the #olicies were revised these ceilin+s were re'ovedand total rei'/urse'ents were allowed with in the li'it of the #olicy a'ount.

The total li'it for #olicy covera+e was also increased. ;ow a #erson /etween !'onths to 5 years of a+e can /e +ranted ediclai' #olicy u# to 'ai'u'covera+e of Bs. ( la=h a+ainst accidental and sic=ness hos#itali3ations durin+ the#olicy #eriod as #er latest +uidelines of eneral Insurance 9or#oration of India.This sche'e is offered /y all the four su/sidiary co'#anies of I9. ediclai'sche'e is also availa/le for +rou#s with su/stantial discount in #re'iu'.

The current statistics on health insurance indicate that out of 1 /illion#o#ulations only a/out 2.( 'illion of #o#ulation is covered /y ediclai'sche'e. The reason for lac= of #o#ularity of this sche'e could /e several. Thehealth insurance #roducts are +enerally co'#licated and it is su++ested that I9

and its su/sidiary co'#anies who deal in non-life insurance 'ar=et which isdo'inated /y 'andated insurance such as accident fire and 'arine do not havee#ertise in 'ar=etin+ health insurance and therefore this sche'e is not #o#ular.Health insurance also re#resents very s'all #ercenta+e of overall /usiness of I9and its su/sidiaries hence they have also not focused their attention in this area.The I9 co'#anies have little interest and 'ean to 'onitor the sche'e. Itshould also /e reco+ni3ed that /ecause of technicalities of health service /usinessthere are nu'/er of cu'/erso'e rules which have ha'#ered the acce#tance ofthe sche'e. It is also re#orted that in nu'/er of cases the a##licants of oldera+es have /een refused to /eco'e 'e'/er of ediclai' sche'e due tounnecessary conservatis' of the co'#anies.

ediclai' has #rovided a 'odel for health insurance for the 'iddle class and therich. It covers hos#itali3ation costs which could /e catastro#hic.

#amily floaters $lan s- These can /e seen as a++lo'erations of individualhealth #lans for a fa'ily. The /enefits re'ain lar+ely the sa'e /ut the su'insured can /e availed /y any or all 'e'/ers of the fa'ily and not a sin+le#erson. Bather than /uyin+ say a Bs 2 health cover for each 'e'/er ofthe fa'ily of four /y s#endin+ for a total cover of Bs 5 if you /ou+ht an


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)) for Bs 5 each #erson covered under it can avail /enefits u# to Bs5 as o##osed to Bs 2 in the earlier instance. This reduces the needfor you to #ay fro' your #oc=et. lso it co'es at a lower #re'iu' thanotherwise. )) can /e /ou+ht /y an individual who /eco'es the #ro#oser alon+with s#ouse de#endent children u# to 2( years oreven un'arried divorced widowed dau+hter and de#endent #arent.

Critical illness plan%

This is not a su/stitute for a Dediclai'D /ut you should ideally add this layer tothe latter. It #rovides financial assistance if the insured develo#s a seriousail'ent such as cancer or has a stro=e. *ach cover has a list of ail'ents usually4-12 of the'. ne can +et it in the for' of a rider attached to a life insurancecover or as a standalone #olicy fro' either a life insurer or a non-life insurer. Ifcritical illness occurs it #ays the entire su' insured and ter'inates and canha##en only once for any #articular illness.

To +et the #ayout the insured has to survive for ! successive days after thedia+nosis. ;o clai' can /e 'ade durin+ the first 4 days of the ince#tion of the#olicy. The #olicy ter' is usually lon+er "1-2 years$ if this cover is /ou+ht fro'a life insurer as a rider than fro' a +eneral insurer "1-( years$.

Senior citi'ens health pla n:- ost Individual Health #lans ca# the entry a+eat around 6 years while Senior 9iti3en Health Alans are +enerally for the a+e+rou# of 6-5 years. ost can /e renewed lifelon+ or u# to the a+e of 4 andhave a fied covera+e of say Bs 1 or Bs 2. 8esides loo=in+ for su/-li'its those ta=in+ S9HA should watch out for certain illnesses as 'any ail'entsare ecluded fro' the #lan. Senior 9iti3en Health Alans 'i+ht even have the

o#tion to attach a 9ritical Illness #lan rider.

(aily hospital cash benefi t: - This should /e the last o#tion when /uyin+health #lans. ost hos#ital cash #lans 'i+ht also inconvenience you as they offerthe /enefit after dischar+e fro' the hos#ital and only after the#olicyholder #roduces #roof of the nu'/er of days he stayed there. Hos#ital cash/enefit has a #re-defined li'it in 'ost cases say Bs ( #er day for u# to ( daysin a year and u# to 2( days durin+ the entire ter'.

)nitlin*ed health plan s:- These are 'ostly defined /enefit #lans - usually forthe lon+ ter' - and unli=e a standard health insurance #olicy the #ayout is not

de#endent on the costs actually incurred.

Health li#s are 'ade u# of two #arts - a health #lan and a unit-lin=edinvest'ent #lan. lthou+h these #olicies are /ein+ sold /y life insurers they 'aynot cover life ris=. ut of the #re'iu' one #ays a #ortion +oes towards 'edicalcovera+e and the rest of the #re'iu' is invested in a fundthat o#erates li=e a 'utual fund.


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Covers from life insurers: - Kife insurance co'#anies too have startedofferin+ health #lans. ost of these are however defined /enefit #lans - the #re-s#ecified a'ount which is the su' insured is #aid as co'#ensation irres#ectiveof the actual a'ount of e#enses incurred.

lso these are lon+-ter' havin+ a fied #re'iu' for say three five or even 1years. ost of the ty#es of #lans discussed a/ove are on offer. So'e will eventhrow in a life cover for +ood 'easure.

+ote on $reexisting diseases - This is a co''on #ro/le' area since therewas no standard definition of #re-eistin+ illness earlier. In Lune 25 theeneral Insurance 9ouncil said ,the /enefits "of health insurance$ would not /eavaila/le for any condition ail'ent or in7ury or related condition for which theinsured had si+ns or sy'#to's andor was dia+nosed andor received 'edicaladvicetreat'ent #rior to ince#tion of the first #olicy until %5 consecutive'onths of covera+e have ela#sed after the date of ince#tion of the first #olicy.,

Employer provided insurance s c hemes

There are several +overn'ent and #rivate e'#loyers such as Bailway and r'edforces and #u/lic sector enter#rises that run their own health services fore'#loyees and fa'ilies. It is esti'ated that a/out ! 'illion e'#loyees 'ay /ecovered under such e'#loyer 'ana+ed health services "*llis et al. 1446$.

eneral Insurance 9or#oration "I9$ and its four su/sidiary co'#anies and KifeInsurance 9or#oration "KI9$ of India have various health insurance #roducts.These are shadee# Alan II and Leevan sha Alan II /y Kife Insurance9or#oration of India and various #olicies /y eneral Insurance 9or#oration of

India as under: Aersonal ccident Aolicy Lan ro+ya Aolicy Ba7 Ba7eshwariAolicy ediclai' Aolicy verseas ediclai' Aolicy 9ancer Insurance Aolicy8havishya ro+ya Aolicy and


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They are +enerally tar+eted at low-inco'e #o#ulations and the nature of the>co''unities? around which they have evolved is Guite diverse: fro' #eo#lelivin+ in the sa'e town or district to 'e'/ers of wor= coo#erative or 'icro-finance +rou#s. ften the sche'es are initiated /y a hos#ital and tar+eted atresidents of the surroundin+ area. s o##osed to social health insurance'e'/ershi# is al'ost always voluntary rather than 'andatory.

In recent years co''unity health insurance "9HI$ has e'er+ed as a #ossi/le'eans /ecause of:

() Improvin access to health care amon the poor* and

(+) ,rotectin the poor !rom indebtedness andimpoverishment resultin !rom medical ependitures.

ost of the insurance sche'es have /een started as a reaction to the hi+h healthcare costs and the failure of the +overn'ent 'achinery to #rovide +ood Gualitycare. The o/7ectives ran+e fro' M#rovidin+ low cost health care0 to M#rotectin+the households fro' hi+h hos#itali3ation costs.0 8I)


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he Gaps " i mprovements area i n Health Insurance

Health insurance is an e#ense to /e sure /ut the i'#ortance of health insurance really

defray that e#ense. To save 'oney it is /etter to wor= with a health insurance a+ent whhel# you co'#are #lans and costs to find the /est one for you and your fa'ilyDs nBe'e'/er 'edical e#enses are hi+her than ever so if you have to /e hos#itali3ed foreason your costs are +oin+ to /e a lot hi+her than you 'i+ht have antici#ated. They could hi+h that you si'#ly canDt #ay the' and /an=ru#tcy is your only recourse. It doesnDt 'a=e to +o /an=ru#t and ruin your financial future 7ust /ecause you didnDt /uy afforda/le hinsurance.

Thin= a/out another i'#ortance of health insurance. Eour fa'ily. your children need healtthrou+hout their youn+ lives and it see's li=e =ids are always +ettin+ into scra#es that reGtri# to the e'er+ency roo'. If you ta=e care of a fa'ily you owe it to the' to +et h

insurance. ithout it your entire fa'ily is vulnera/le and if anythin+ ha##ened would youwant to live with the +uilt that havin+ no health insurance could createO

The i'#ortance of health insurance cannot /e overrated. 9ertainly it can /e difficult to co'with the 'oney for individual health insurance. 8ut can you afford to /e without it reallyO

ver the last ( years India has achieved a lot in ter's of health i'#rove'ent. 8ut still Inway /ehind 'any fast develo#in+ countries such as 9hina Nietna' and Sri Kan=a in indicators "Satia et al 1444$. In case of +overn'ent funded health care syste' the Gualiaccess of services has always re'ained 'a7or concern. very ra#idly +rowin+ #rivate h'ar=et has develo#ed in India.

his private sector brides most o! the aps bet$een $hat overnment o!!ers$hat people need. Ho$ever# $ith proli!eration o! various health technoloies and eneral price rise# the cost o! care has also become epensive and una!!ordable to lare sement o! population. he overnment

people have started eplorin various health !inancin options to maproblems arisin out o! ro$in set o! compleities o! private sector roincreasin cost o! care and chanin epidemioloical pattern o! diseases.

The #ro#ortion of insurance in health care financin+ in India is etre'ely low. Au/lic s#endin health care is very low at 1@C and the ;ational Health Aolicy has reco+ni3ed this ore th

56C of healthcare financin+ is throu+h un#lanned or non-contri/utory s#endin+ 56C fro'of-#oc=et e#enses 5!C fro' #rivate sector s#endin+ Health care financin+ in India.

s #er the statistics of the total health e#enditure in India worth Bs ! la=h crore the s#enon hos#itali3ation accounts for Bs 1 la=h crore in the country./ainst this# the eistlevel o! health insurance premium $as $orth only 0s 1#222 crore# $hich methat a ma3ority section o! the Indian populace does not have an insurance cov$hich is a reat opportunity to be tapped.


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The Insurance industry should share data with each other as the data of #eo#le who have

clai's is availa/le which is not adeGuate. 'uch wider data/ase would 'a=e all the differ

The IB


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6. Sini!icant under$ritin losses !or Health Insurance busine

India

7. 5ack o! standardi&ation and /ccreditation

norms in healthcare industry in India

8. Insu!!icient data on Indian consumers " diseasepatterns resultin in di!!iculty in product

development and pricin.

There has /een so'e resistance "o/served$ fro' the Health Insurance9o'#anies which is addin+ to the sus#icion of custo'ers /efore 'a=in+ anydecision to enroll with a health insurance #olicy or sche' e . The dou/ts raised /ycusto'ers are as follows:-

(,)BS ,# C)S,-.RS

1. ;ew 'odern #rivate insurance co'#anies are indulging in moneyma*ing/usinesses with little interest in insurance.

2. Insurance #olicies contain too many exclusion clauses.!. ost insurance co'#anies now use call centers and staff attempt to

anser 0uestions by reading from a script. It is difficult to s#ea= toany/ody with e#ert =nowled+e.

These are so'e of the 'ain short-co'in+ which the Health Insuranceco'#anies need to tac=le to raise the confidence level of the custo'ers and also+ain #ositive word of 'outh feed/ac= & references.

In addition there are so'e inherent chan+es which the industry should loo= atif we want to 'ove towards the net #lat-for' in Health Insurance in India. ecan call these the >Aillar of 9han+es? necessary to evolve the Health Insurance'ar=et.

These chan+es need to /e /rou+ht a/out at the industry level where all theco'#anies should 'a=e co'/ined efforts.

$illars of Change

I a' 7ottin+ down the sa'e with a /rief descri#tion of the chan+e that are

reGuired.

1. 9onsu'er wareness

We need to create the Awareness Increase exposure through media (TV, Radio and

Internet). In this case, the traditional model is more generic and there is a need to reinvent

the messages based on target groups to achieve the business obectives.


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2. Standardi3ation of Health care costs and ccreditation nor's

Kac= of standardi3ation & accreditation 'a=es it difficult to 7ud+e the Guality ofhealth service /ein+ #rovided /y health-care institutions. In addition varyin+treat'ent cost & /ar+ainin+ is addin+ to the woes of the health industry.

orldwide the Standardi3ation & ccreditation of Hos#itals of Healthcare


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IssuesandChallengesfacedbyvariousparticipantsoftheHealthInsuranceValueChain

/hus,therearesignificantchallengesbeingfacedbythee8istingparticipantsofthehealthinsurancevaluechain6hichhaveimpactedthegro6thofthehealthinsuranceindustryinndia.hilethesechallengesneedtobeaddressedtoincreasethehealthinsurancecoverageinndia,thereisalsoaneedtounderstandthechallengesfacedbythendianconsumerinthee8istingmar!etenvironment.

pportunities in Health Insurance

ccordin+ to recent news re#ort Health insurance continues to /e the fastest+rowin+ se+'ent with annual +rowth rate of ((C. Health Are'iu' has risen toBs. !! crores in 26-2@.

The Indian healthcare insurance industry was worth I;B (12(crores with aco'#ounded annual +rowth rate of a##roi'ately !@ #ercent /etween 22 and25. The 'ar=et #enetration is only around 2 #ercent of the total #o#ulation inIndia. The Health Insurance Industry is one of the fastest +rowin+ se+'ents

a'on+ other non-life insurance se+'ents. The Indian healthcare insuranceindustry is worth I;B 6%4@ crores with a co'#ounded annual +rowth rate ofa##roi'ately %2.! #ercent /etween 25 and 21(. The 'ar=et #enetration iswill /e ! folds hi+her in 21(. The 'ain factors of +rowth are increasedawareness.


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Strengths 1# u ture 2r o th #actors3

India is now the second fastest+rowin+ 'a7or econo'y in theworld.

Third lar+est econo'y in theworld

Indian healthcare has e'er+ed asone of the lar+est service sectors inIndia.

Healthcare s#endin+ in India ise#ected to rise /y 1(C #er annu'.

Healthcare s#endin+ couldcontri/ute 6.1C of


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s #er the recent re#orts fro' various a+encies the Health sector has the#otential to /eco'e a Bs. 2(-crore industry /y 21. ccordin+ to orld8an= Be#ort 44C of Indians will face financial crunch in case of any criticalillness. Hence the need for Health Insurance

In the net !our years (by +27)# a host o! !actors $ill be responsiblein drivin the !uture o! Health Insurance.

The under-mentioned factors will play important role, in driin7 the Health "nsuranceindustry to the ne:t platform#

1. Increasin+ awareness of Health Insurance as risin+ healthcare costshave increased need for health insurance

2. Su##ortin+


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There will /e a nu'/er of factors which will lead to +rowth for the Health industryincludin+ health insurance. The


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o Households that have hi+her education levels tend to s#end 'ore#er illness

The


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lso 'ost new entrants have a tendency to tar+et the /usiness of eistin+co'#anies rather than e#andin+ the 'ar=et this is 'yo#ic. This not only leadsto intense co'#etition for the new #layers and their 'uch of their effort is s#enton tryin+ to ca#ture eistin+ custo'ers /y offerin+ /etter service or otheradvanta+es. Eet the /enefits of this strate+y are li=ely to /e li'ited.

)or ea'#le (C of the current de'and for +eneral insurance co'es fro' thecor#orate se+'ent. The cor#orate are li=ely to sho# around for the /est rates#roducts and service. ;evertheless the cor#orate se+'ent as a hole will not /e a/i+ +rowth area for new entrants. This is /ecause #enetration is already +oodhere co'#anies receive +ood service /ecause of their si3e and rates are tariff+overned.

In /oth volu'es and #rofita/ility therefore the sco#e for e#ansion is 'odest. /etter a##roach 'ay /e to ea'ine s#ecific niches where de'and can /e 'etor sti'ulated li=e tar+etin+ the chief wa+e earners and 'ore i'#ortantly'ovin+ to rural India. The 'ain thrust of a new insurer?s strate+y should /e to

sti'ulate de'and in areas that are currently not served at all.

If insurers are to ta=e advanta+e of India?s lar+e #o#ulation and reach a #rofita/le'ass of custo'ers new distri/ution avenues and alliances will /e i'#erative.This is also true for the nationali3ed cor#orations which 'ust find fresh avenuesto reach eistin+ and new custo'ers. There would /e su/stantial shifts in thedistri/ution of insurance in India.

119767972 health insurance

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