All eyes are set on India’s universal health coverage, Ayushman Bharat. Insurers like Mayank Bathwal, CEO of Aditya Birla Health Insurance are keeping a close watch too. But he feels there are specific factors that have to be accounted for to unleash the benefits of the concept. He talks about it at The Free Press Journal’s conference on health insurance, held in Mumbai.
There is an annual growth of 25-30 per cent in the health insurance industry, rising investor interest and existing players spreading out for growth. We had Rs 42,000 crore premium in FY2018 which is good but a mere 6 per cent of the total healthcare spend of Rs 6.5 lakh crore. This ideally should be 25-30 per cent, which tells you what the scope is. Second the overall environment, be it the regulator or the government, is pretty positive.
Both the earlier schemes and the latest Ayushman Bharat scheme provided a clear indication that providing universal health coverage is a priority, and health insurance will play a vital role in this. Ayushman Bharat is amazing in concept and if executed well, it can work wonders in terms of improved infrastructure, better technology deployment and better discipline while getting to the goal of greater population coverage.
All this will benefit health insurance. Likewise, IRDA is a proactive regulator, open to suggestions and interaction. Thirdly, we now have many standalone health insurance players coming in which means better focus, better service offering and improved communication.
Opportunities are many, let us pick the main ones. The industry firstly has to create awareness about how it protects insured individual against potential insolvency risk from health conditions. Data shows that healthcare cost is among the biggest reasons for financial stress. Health issues can be faced by anyone. So there is a need to transfer potential reason for stress, before it strikes us.
The health insurance industry could take a cue from the successful mutual fund industry campaign. Secondly, though growth is substantial, customer perception is not very positive. When customers feel that delivery of benefit is not as promised, it tells the industry that we must improve on messaging.
Is the promised benefit clearly communicated, how much control the insurer has on the delivery of the healthcare process – all these impact perception and need to be addressed. Third is the matter of fraud, waste and abuse which creates 15-20 per cent inefficiency in the system which reflects in the cost of accessing insurance.
People say health insurance needs to be more affordable, but paradoxically none of health insurance companies are currently making operating profits. Health insurers need to demonstrate the value delivered against their premium incomes, graduate to being partners or health risk managers. Be it illness preventive measures, or health situation monitoring – more interaction is needed.
Our focus when we started around 30 months ago was to get more of the 20-35 year old people (two-thirds of population) into health insurance. We incentivised wellness and our customer base today is three-four years younger than the industry average. If you create customers early and engage with them meaningfully, then wellness would help reduce claims and likewise maintain better individual health.
Second, leveraging technology and digital channels can improve product offering, customer experience and efficiency. For instance, we can increase our coverage beyond hospitalisation to cover the outpatient expenses through network creation and monitoring of service delivery, while managing the threat of misuse of benefits to a large extent. Technology can help digitise information and create protocol-driven big data, which can be analysed to improve efficiencies.
All this can go towards getting insurance to cover 25-30 per cent of healthcare cost. I am optimistic about the role this industry can play, in sync with the government healthcare framework and targets. If we make healthcare accessible, it will go a long way in making India achieving its potential.