Health Insurance

Standardization in Health Insurance: Streamlined Business & Satisfied Consumers!

Health Insurance continues to be one of the most dynamic and fast evolving sectors of the Indian insurance industry. Gross written premiums by insurance companies has increased from Rs.17565 cr in FY’ 2005 to Rs.59898 cr in FY’2012 showing a very healthy 19% CAGR growth. The industry has shown significant improvement in operational parameters even as claims ratios continue to remain high. However, the growth is fraught with numerous challenges including efficiency, affordability and accessibility of health insurance. The efficiency in the health insurance system is also plagued by mistrust between providers and insurers due to non-standardized practices and formats in an evolving industry. Standardization therefore is critical to enhance quality delivery of health insurance, encourage innovation and greater penetration of health insurance in the country.

Health Insurance Guidelines 2013

The IRDA recently notified the health insurance guidelines 2013 to standardize health insurance in the country. The regulator has mentioned that the guidelines are meant to reduce ambiguity and enable all stakeholders to provide better services and enable customers to interact more effectively with insurers, third-party administrators and providers. The guidelines includes various facets of standardization including definitions of critical illnesses, definitions of commonly used insurance terms, list of excluded items in hospitalization indemnity policies, billing formats, discharge summary and standard contracts between TPA, insurers and hospitals. Undoubtedly, this represents a very important milestone in ushering standardization in the health insurance sector. Let’s dwell on each of these facets to appreciate the importance of this initiative.

The Guidelines aim to reduce the existing ambiguity between the insurer/reinsurer, provider and consumer due to varied critical illnesses definitions. The differences in the definitions of Critical Illnesses adopted by the different insurers have created confusion in the minds of consumers wherein products are difficult to compare and the industry especially at the time when insurers and re-insurers have to arrive at a point where lump sum payment is made. The availability of standard definitions would now ensure better comparability and uniformity in the understanding of critical illness definitions.

This is significant in the background of health ministry’s efforts to develop standards for making and maintenance of Electronic Health Records in the country being coordinated by FICCI. This is the single most standard tool which will help in data warehousing, monitoring and portability which would greatly reduce diagnostic time and help in creating a national health database. It should also pave the way for an all encompassing Health information portal which has detailed demographic data helping in periodic review of disease-wise, city-wise and region-wise information. Healthcare delivery would certainly be improved tremendously with all these measures.


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