Munish Daga, CEO, Remedinet Technologies, expounds on the scope and possibilities of digital platforms for healthcare insurance in India
Despite the technological evolution of the healthcare sector over the past two decades, health insurance in India continues to grapple with the same difficulties such as lack of adoption and complex utilisation. As a result, the adoption numbers struggle to make it past a disappointing percentage figure in a country with the second largest population in the world. On the flip side, the situation in which the health insurance industry currently finds itself, also presents tremendous opportunities to evolve, possibility to scale, and scope to become profitable. The emergency of the situation, in several cases has not only served as a business opportunity, but also led to the adoption of digital frameworks as foundational pillars that ensure last mile delivery of health insurance for the policyholder.
Back tracking to the gaps in the health insurance industry, one of the key problems that is making health insurance utilisation complicated for the policyholder is the lack of coherence between the provider – the hospitals and the payer – the insurance company/ third party administrator (TPA). Owing to the current claim exchange process, the policyholder has little or no information or awareness regarding the status of their claim when the policy is being utilised. Worse yet, lack of a standardised and transparent process to adjudicate claims adversely affects the patient’s experience of utilising their health insurance policy at the time of hospitalisation.
Digitising health insurance
In line with a fast-catching trend – transacting cashless for anything from day-to-day expenses to larger transactions, e-commerce and online payments have made it possible to avail of services and products at the click of a button. Such online payment systems are linked seamlessly with banks and the customer’s bank account to process these transactions in real-time.
To make this more relatable, imagine if the current e-commerce industry were to function manually where every time we place an order online, an individual sees the details of the order, prints it, goes to the warehouse or the vendor with the print out, checks the availability of the product, goes back to the computer, and sends the customer a response. Also, take into account if there are any changes, or unavailability of product, and the fact that the individual processing the order has to update the customer regarding the placed order every step of the way.
There is no way the e-commerce industry would have scaled to this extent had it depended on human intervention. But this is the reality for health insurance today. The health insurance desk at the hospital sends and e-mail or FAX to the payer with the policyholders information and treatment details, the payer receives such claims from thousand other hospitals, responds to the hospital with queries, the hospital responds again over e-mail or FAX, and the time – consuming cycle continues.
Cashless for health insurance
While significant strides are yet to be made with respect to digitisation, cashless health insurance is being increasingly adopted by corporates for their employees, as well as health insurers are increasingly encouraging cashless health insurance by providing policies that can enable policyholders to use their policies cashless at empanelled hospitals. But to make cashless health insurance truly cashless, standard, and universal for all, the flexibility and transparency that digital platforms have to offer need to be leveraged to make health insurance simplified for the policyholder.
Employing a strong technology foundation will make the entire health insurance process electronic, paperless, transparent, and real-time, and thereby efficient for the hospital, the payer, and the end customer as well. Cashless health insurance mandates pre-authorisation of the claim before the treatment begins. To have claims pre-approved in real-time, only a platform that enables electronic data capture and exchange, with direct integration with hospital HIS and/ or drop-down menus that will allow the insurance desk at the hospital to share information with the insurer at the click of a few buttons will be able to scale and match the needs of growing healthcare and health insurance needs.
Take for example health insurance claims processing in the US. Nearly 80 per cent of the claims are processed automatically or what is also known as straight-through processing, where claims are processed without manual interventions (according to America’s Health Insurance Plans, a national trade association). The same associate has also recorded a significant reduction in the cost involved where the cost came down from $4 to $1 per claim.
Leveraging technology in similar manner to make the claims process digital and efficient in India will make the transaction transparent for the end consumer where they can be looped into process by notifying them about their claims’ status every step of the way. In the Indian context, there are a few examples of public healthcare schemes and private health insurers that have embraced electronic platforms to process cashless health insurance claims. While such initiatives have laid the foundation for digitalisation, they indicate the scope and possibilities of digital platforms for healthcare insurance in India.
Chief Minister’s Comprehensive Health Insurance Scheme – Tamil Nadu (CMCHISTN): Launched in 2011, CMCHISTN covers 1.32 crore families in the state, with a cashless health insurance policy at 800+ hospitals for pre-defined conditions. The scheme runs on an electronic platform where all data is captured and stored electronically. The patient can walk in only with their policy ID at an empanelled hospital to avail cashless treatment. Patient’s eligibility and pre-authorisation take place in real-time where in the payer is immediately notified of the patient’s arrival through an electronic platform. The patient experiences a completely paperless health insurance claims process where the entire claims cycle is transparent and efficient, and serves their purpose.
In the case of private health insurers, there quite few notable ones that have taken the leap to transform their back-end infrastructure into digital platforms that allow them to seamlessly exchange claims information with the hospital electronically and in real-time. This has tremendously benefited cashless health insurance policy holders where the overall turnaround time has decreased significantly, leading to quicker discharges, optimum bed utilisation and significant improvements in customer satisfaction.
Let’s not forget outpatient healthcare needs
With these first steps taken and efforts made to simplify the process for the end consumer, there are still many milestones that the sector needs to cross. While health insurance will catch up with other sectors that employ completely cashless and paperless systems for transactions, in the current context there is a need to leverage digital platforms to address outpatient health insurance that accounts for a far larger chunk of healthcare needs than inpatient/ hospitalisation healthcare needs. In developed markets outpatient health insurance market size is 3 to 3.5 times bigger than the inpatient market.
The same technological infrastructures that are slowly gaining prominence can be used as a foundation for a framework upon which an enhanced platform is built to bring in other players of the primary and secondary healthcare ecosystem such as pharmacies and diagnostics. Such a platform will make it possible to deliver outpatient health insurance for an individual who walks into a clinic for an ailment such as a fever or physical injuries that don’t require hospitalisation but can be covered under health insurance.
With a truly mature and tested electronic platform, health insurance in India can evolve to cater to healthcare needs such as dental and ophthalmic treatments, making universal health insurance possible for every single healthcare need.
Does health insurance have a choice?
Landmark rulings such as demonetisation from the recent past have forced the society to transact digitally and transact cashless. It has pushed the economy to become cashless and made it difficult to transact in cash. For universal health insurance, cashless policies coupled with a strong digital transaction framework, can make universal health insurance possible, especially where it is absolutely needed. Furthermore, digital transactions also lend themselves to a host of other improvements for the healthcare sector such as automation and standardisation of the claim process from end-to-end, preventive healthcare management, better product pricing, and much more. At the centre of these enhancements is an efficient and transparent claims exchange for both, the payer and the provider, and a reliable, customer-friendly process for the policyholder.