Policy Bazaar Insurance Show Talks About Health Insurance Changes | N18M

In the last few months, headlines around the health insurance sector have been dominated by the call to reduce tax on insurance premiums. But, during the same time, there's a lot which has happened from the side of government on policy front, from the side of regulator on the regulatory front, and from insurers and distributors on the implementation front. All being done to make health and health insurance ecosystem more inclusive. In this episode of the Policy Bazaar Insurance Show, we put the spotlight on how health and health insurance landscape is changing and how the government, regulator, and insurers and distributors are contributing towards this change. And most importantly, how effectively does it take the three A's of health insurance, affordability, accessibility, and availability. We will be joined by our top panel, Alok Saxena, Retired Additional Secretary, Health, Government of India, and Executive Director, Healthcare at Rodeo Consultants. Also, Girija Subramaniam, the Chairman and Managing Director at New India Assurance, and Yashesh Dahiya, Chairman and Group CEO at PBFintech. Gentlemen, thank you so much for joining us on this special edition today. We've suddenly seen so much activity in the past few days, which is related to the sector. And starting with you, Mr. Saxena, I want to start with a topic that is very much related to those activities. If one has to look at the economic survey which was presented, that spoke about the per capita expenditure towards healthcare to be about Rs. 4500. But more importantly, it spoke about a number that is 50% of the total healthcare expenditure still happening out of pocket. Ayushman Bharat, as the government's flagship scheme, went miles in reducing that number. It successfully did so. But now when we are here at that 50% mark, what should be done in terms of a new approach, a new model of Ayushman Bharat scheme, so that now the next few steps can be taken and this number can be reduced further? And what are those few key effective areas where the new model or the 2.0 model should really target? Thanks, Yash. Actually, I'll begin with giving you some fresh statistics which I called out, it's all in public domain. So we have this National Health Accounts Estimates for India, and the figures they are quoting are the published figures of 1920. Thereafter, there have been provisional figures, estimates for 2021 and 2022, which obviously got delayed because of COVID. And as per the latest estimates, out-of-pocket expenditure, that is OOPS, have come down to 39.4%. And that is from 62.6% in 2014-15. So that's a huge drop. And of course, Ayushman Bharat Pradhan Mantri Jana Rogya Yojana, that was largely responsible for it. Also the second pillar of the Ayushman Bharat scheme, which is the Health and Wellness Centre, which takes care of the primary healthcare, is also responsible. What Pradhan Mantri Jana Rogya Yojana did, it took care of the most vulnerable and disempowered sections of the society, and at that time, almost 50 crore individuals at that time. So it was said that, what about the missing middle? So this present proposal, which has now been approved by the cabinet, takes care of almost 6 crore individuals, irrespective of the income criteria, who are 70 plus. So the most vulnerable segment of the missing middle is now taken care of. They will have a cover of, on family floater basis, 5 lakh for hospitalisation. And those who are existing PMJY covered families, they will get an additional top-up of 5 lakh for the senior citizens above 70 in those families. Girija ma'am, I want to come to you with another question and another issue that time and again we've spoken about the Ayushman Bharat scheme. Parallelly to the scheme, a lot of states are running their own insurance schemes, either through trust model largely. What I want to understand from you is that, does that significantly create discrepancies in the flagship Ayushman Bharat scheme? Does that lead to fragmentation of benefits that a policyholder gets? Just an additional question to that, is it wrong if a policyholder is either enrolled with the state-sponsored scheme or Ayushman Bharat scheme individually? Does it sort of impact the benefits that he gets out of these two schemes? And what should he choose in a situation like that? Ideally, Ayushman Bharat as a scheme, state-sponsored schemes also are similar to the Ayushman Bharat. Only there are a few differences from one state to the other. We are working in the Rajasthan state government. We handle the entire Rajasthan state government Ayushman Bharat scheme. And there actually we have the differences that above the poverty line, people are also covered in that scheme. And that is the difference that is there. And such differences exist from one state to the other. But the point is that we are happy that in one way or the other, the scheme is reaching out across the length and breadth. So it is effective. But it definitely can be more effective if we are able to see that the insurance model is employed. Because there we are able to get the hospitals onboarded. Yashish, I want to ask one question to you. For someone, and in this case I speak about Policy Bazaar, where you get more than 50%, more than half of your revenue from tier 2 and tier 3 areas. How do you sort of propagate awareness in these tier 2 and tier 3 regions? So for someone who is commercially also making sense in tier 2, tier 3 areas and wants to see more headroom in those areas, how do you take forward awareness about health insurance in these sections of geography? The amazing thing about India is the internet and the television is actually everywhere. 70% of the total sales now come from tier 2 and tier 3. I think today if I think about health insurance broadly, the awareness of the product is there. So people know there is something called health insurance where if you pay a premium, if you go to a hospital, the company could pay for the claim. I think people still struggle with confidence and trust because that process of getting a claim is still cumbersome and I think the technology chassis that Ayushman Bharat is bringing on board can be a big saving force there because that chassis can be used by everybody. But at a fundamental level, why is there push and pull at the point of claim? It's at a fundamental level a lack of trust and what is the lack of trust? Did the person have diabetes but did not declare it? Was the person a smoker, drinking a lot but did not declare it? Was there some disease that already existed? Did the person already suffer from cancer but had not declared? That is one side of things. The second side of things is, was hospitalization required at all? It's a dengue case but because there is insurance, he's just admitted. If you think about the insurance company, it on one side has consumers and on the other side it has the hospitals. I think between all three of these, there is a trust deficit which to a large extent data and technology can solve and to some extent regulation solves. But I fundamentally believe at some level competition will solve that because without competition, the reality never kicks in. On the whole, the amazing news is there is a segment of population which is roughly half. In my opinion, it's about 60 to 70 percent it can be but today it's already 50 percent which is a huge amount which is being covered one way or the other by the government. I think the person we have to worry about as the private sector because we are in the private sector is people earning more than five lakh rupees a year. That segment is also in stress. There is a good 25 percent of population that's in that segment. Now what is special about these people? These people are broadly earning about three to four times the national average. Now this is a world over thing not to do with India. Wherever in the world somebody earns more than four times the national average, they have to take care of themselves. They no longer rely on government education, government health care and that's even in the most wealthiest part of the world that's still true. So I think to some extent these people have to fend for themselves and thus they need that education around insurance because that is the one way in which they can actually afford health care otherwise health care is too expensive. As you said, the problem right now would be to make that journey from trust deficit to a point where we can strengthen the trust enough between the three stakeholders and I think one very right thing that you said competition could be one thing amongst not just hospitals but insurance companies also so that everyone does to bring that trust and strengthening of that trust. Well it's been a list of changes from the government you know to make India's health care ecosystem more inclusive but in a country like India it's never enough and only expected to continue on this path but at this point let's take a very short break. Lots more on the other side of this very short break. Do stay tuned. Welcome back to the Policy Bazaar Insurance Show. Now we are joined by a very special guest Dr. Naresh Trihan, CMD at Global Health. Hospitals are an equally important stakeholder to India's health ecosystem and the views from Dr. Trihan will be very crucial today. Sir I want to understand from you, hospitals as we see today have become a very very strong stakeholder when it comes to India's health ecosystem and directly impacting the health insurance sector as well. What I want to understand from you is that how can hospitals make the entire process from admission of the patients to the treatment to the discharge and the settlement of claims most importantly a completely hassle-free process for any person who gets admitted to the hospital and more importantly what do you require from your partner stakeholder that is the health insurance companies in making sure that this process is seamless? So as has been discussed by the panel there are three participants in this whole cycle and the center point is the patient who needs to access health care. Now we are the providers and then insurance is the enabler for it. Worldwide we know that there has to be a safety net for every individual in any country. As far as India is concerned we've had this big system where a government has taken incremental responsibility over the years to cover more and more percentage of our population so that the people who were left out of the whole safety net have been included and that's a remarkable thing to have happened. Now the question is not only is the fact that you need coverage you also need the providers because the demand of the population will keep increasing especially as our population ages it becomes more and more critical that we are able to provide them the service. But the center point here is what is the cost? What are the things that we can do to make the patient who's accessing health care get the best possible treatment, get the best possible discharge process and try to do it make it affordable across the board so that the premiums from the insurance companies don't go up that much. So one is to understand that there is a need for actual costing that must be done for every procedure that is run because any responsibility that is put on the providers has to be in a measured form in the sense that there unless you do the costing you will not be able to come up with a fair price of what it takes to deliver the service. Second is the fact that insurance premiums because we are talking about private health insurance the insurance premiums will also have to be kept under control. Now the more efficiency we add into this whole system of the provider, of the insurance company and the fact that the responsibility along with it of being honest up front. So we all must understand our responsibility. We do not, the providers have to be very strict even if the patient wants us to change any history or anything we should never, never, never participate in that. One of the big pinch points that patients experience is the long waiting time between discharge summary being sent to the insurance company and the actual revert back and patient leaving. So we've been working tirelessly on this with insurance companies to say how can we make it more seamless and as the trust level keeps going up we will see that the patient can get a much better service. I want to come to Girija ma'am with one question and that is about cashless everywhere. Very recently the industry took it upon itself to make cashless everywhere possible for policyholders in case of settlement of claims. If cashless everywhere is embedded in the regulations itself through force, through the regulator, do you think that will lead to a better enforcement and help policyholders in what it intends to do finally? Yeah basically the initiative, cashless initiative is a very welcome step and I think this is something the entire industry is working on. It has given us a platform to prove that as an industry we can work in unison and develop a customer experience that will be uniform across the country at various hospitals. Definitely there will be a future where cashless everywhere will be a reality and customers across various insurance companies will have uniform costs, uniform experience across hospitals. Yashish, I want to speak to you about something which happened very recently about the master circular also which the regulator issued. Some very interesting points under that thing, request for cashless to be approved within one hour, discharge to happen within three hours. These are really time-bound ways in which a policyholder who's already quite distressed at that point of time can be helped in ensuring that the process is smooth. How do we break this particular cycle that we have in our hands? I'll try to give you the answer in what I think is going to play out in the next 5-10 years. Either some hospitals have to seriously get involved in insurance or some insurers have to get seriously involved in hospitals because that is what will create the benchmarks. The only person you can always trust is yourself. The moment you're dealing with a second party there's always different incentives, different alignments. One thing I wanted to mention because this is the part that people across the world don't understand when they think of India. Nowhere else does an open architecture insurance scheme ever work the way it works in India. Nowhere else in the world can you go to any hospital whatsoever and just walk in and get treated. It does not exist. It's always closed loop. You cannot just take your insurance policy and go everywhere and get treated. It just doesn't work. Open architecture is just too expensive. Yashish, one question to you. Another very interesting regulation that we are looking at is going to be the national claims exchange. So much data. Do you think this could really plug the problem of claim frauds because you would know exactly what the person's done, if there's any pre-existing illness, if he's taken claims before, where was he treated, what was the treatment, what was the cost. You can imagine the kind of data that you would have. Absolutely. So first of all, yes. But I would also say what claims data already exists. So for example, we've been selling health insurance for 17 years. For every one of my customers, I know what claims they've had. So what their bill was, what claim they had, for what disease, what was rejected, what was accepted. This already exists with the IIB. I think it is about using that data more. What is missing is what existed before the person had insurance. I think that coming in with the NHA data would be very powerful. So far that is missing. I don't have an insurance policy today in India. So nobody really knows anything about me in terms of, did I actually go to hospital yesterday? What did I get checked for? Do I have a disease? Nobody knows that. I think that's the conundrum. The second part, I just want to mention on this. I think people do not fully appreciate just how difficult writing these health insurance policies is. Today you buy a corporate health policy. Next year, you may not have one. And the coverage is very limited. If you change your job, you may not have one. If you gather a disease in the middle, you will perhaps not get a new policy because no other company is going to take you on. Lifetime renewability. Please appreciate this is only available in very, very few countries in the world. There are countries where the entire insurance sector has gone bankrupt on this one clause, lifelong renewability. It's a very big thing that already exists. The Indian regulation from a health insurance perspective, one of the friendliest regulations in the world from a consumer perspective. I think where we are missing is the trust element. And that part needs to be solved. As I said, tech will solve. But to some extent, overreaching into each other's areas will also solve. Mr. Saxena, I want to come with you with a very interesting question, which could be a great idea if it's looked at seriously. And that is with respect to having your employer insurance policy to continue after your employment as well. It's just a thought at this point of time. Assuming you work for a private sector, you have the employer giving you an insurance policy, you go out of service at one particular point in your age. Why can I not continue to contribute towards that health insurance policy that I had out of my savings rather than buying a new policy altogether after that period? Second part of that question, if one has to extend it to government employees and PSU employees as well. Government employees, of course, if there's a pension element, why can the pension not be given or the benefits to that particular individual not be given after deducting that little premium towards the health insurance policy? Same with PSU. Contributing a part of your salary or your savings towards that policy and continue that policy till the point that you want to. So for the central government employees, it's already happening. So when a central government employee retires, they have to pay a lifetime subscription for the CGHA scheme, which takes care of OPD as well as IPD expenditure for the rest of their life, the spouse and the dependent as well. So that's there. And this is a good idea. I mean, in the government, we are practicing it since 1954. So this can be rolled out in PSUs, in the state PSUs, in municipal bodies where, you know, age of retirement means that your cover gets ended. So I think that's something very eminently doable. And I don't see any problems there. But simultaneously, we need to give focus on primary care, because health works on this hierarchy of primary, secondary and tertiary. So I think these are the things. But yes, for a person who's retiring, it's important that we should allow him or her to carry the policy forward. With that, it's curtains down on this episode of the Policy Bazaar Insurance Show. We come back with a fresh new edition very soon on another very interesting topic around insurance. Till then, keep watching CNBC-TV.