February 13, 2025
Moneycontrol Professional Panorama | Fixing the hospital-insurance tangle  

The medical insurance house has been a tricky one.

Pricey Reader,

Dr Devi Shetty-promoted Narayana Hrudayalaya has bought the insurance coverage regulator IRDAI’s permission to check out an built-in healthcare cum insurance coverage mannequin, or managed healthcare. This is not going to be the primary time {that a} healthcare supplier has dabbled in medical insurance. Apollo Hospitals too had promoted an insurance coverage enterprise below Apollo Munich that was finally offered to HDFC and folded below its HDFC Ergo normal insurance coverage arm. Max India offered its stake in Max Bupa to True North and the medical insurance is now known as Niva Bupa.

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Whereas the concept could seem an previous one, the sooner ones had been seen extra as extensions of the group’s investments within the healthcare sector, resembling diversifying into medical insurance, diagnostics or pharmacy chains. These companies could be incubated by the primary holding firm, however finally have a enterprise mannequin unbiased of the father or mother. That’s, the diagnostics and pharmacy wouldn’t essentially be captive to the hospital chains owned by the father or mother. That made sense as the surface market alternative was a lot bigger and these companies may change into unbiased.

Over time, it’s been a combined image. Extensions resembling pharmacy chains and diagnostic chains have needed to compete with stiff competitors from new entrants, particularly after a funding deluge noticed many standalone entities emerge. The medical insurance house has been a tricky one anyway. However primarily, the hospitals enterprise itself requires vital sources, each managerial and capital. That want has elevated much more, as VC/PE funds are making a beeline for the sector, investing in hospitals – chains and standalone ones. Many have exited or pared down their stakes in these ventures. The sector is seeing consolidation and hospitals are additionally resorting to growing their investments in a cluster fairly than spreading out to completely different markets.

Once more, non-public capital’s curiosity in hospitals just isn’t new, however the tempo and degree of investments is important on this spherical. There could also be a funding winter for startups, however point out hospitals and the purses open by magic. The legacy hospital chains should be cautious of those developments as a well-funded competitors with strain from traders on the efficiency entrance may see extra demand for a similar pool of sufferers.

Hospitalisation prices have additionally risen considerably up to now 3-4 years, leading to increased claims’ payouts being made by insurers. That, in flip, places strain on the medical insurance firms’ efficiency, which then leads to disputes on claims, with hapless sufferers caught in between. He additionally factors out that Narayana additionally has a historical past of giving comparatively reasonably priced healthcare choices, particularly in its residence state of Karnataka.

A managed healthcare mannequin, as defined in an interview on the brand new mannequin by Dr Shetty, printed in TOI on January 8, is an revolutionary concept. It intends to take a position Rs 150 crore within the enterprise and regularly onboard sufferers, with pre-screening and it’ll embody protection of pre-existing diseases. What which means is that sufferers will in all probability must endure exams in order that the corporate has a full image of their well being situation, and repair premiums accordingly, however not deny protection in case of opposed well being circumstances.

However care is prone to be supplied on a steady foundation and never solely within the case of hospitalisation, in contrast to the mediclaim mannequin, which suggests it may cowl OPD and even investigations that may quantity to a tidy sum and are usually not lined by medical insurance except hospitalisation takes place inside a pre-determined interval after the investigations had been achieved. OPD is obtainable in particular insurance policies or as an add-on in mediclaim. The claims expertise below the brand new system ought to be smoother as disputes is not going to come up, because the hospital and insurance coverage supplier are built-in and the affected person’s medical historical past is already documented. Premiums may be affordable, in consequence.

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These are features that ought to be engaging to sufferers. However there might be questions. What is going to the price of such an insurance coverage/managed healthcare bundle be because it’s a complete protection and never simply hospitalisation insurance coverage? Will affected person acceptance be there, as it could tie them to 1 hospital community? What in the event that they need to go to a unique hospital for a specialised surgical procedure? Will they want a separate medical insurance coverage along with this? What would be the co-pay quantities? Time will inform if the solutions fulfill sufferers.

India’s healthcare issues are advanced and the options don’t must be a one-size-fits-all selection solely. If Narayana’s preliminary expertise proves to be good and it may be scaled up, then different healthcare establishments can observe swimsuit with their very own fashions. And it’s doubtless that the medical insurance coverage supplied by normal insurance coverage firms can co-exist with this. It is usually being rolled out in one among India’s prosperous cities, with a big white collar inhabitants, and one which’s open to revolutionary options to conventional issues. Will Narayana crack the hospital-insurer code is the massive query that sufferers, business and even traders might be awaiting solutions for.

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Ravi Ananthanarayanan
Moneycontrol Professional