'Standardised rates will benefit both insurers, customers'
Malti Jaswal, CEO, E-Meditek (TPA) Services, tells Chandralekha Mukerji how the Preferred Provider Network (PPN) will affect the health insurance industry.
Three top hospital chains - Fortis, Apollo and Max Healthcare, who have not joined PPN - feel that standardisation of rates is not feasible. What are your views?
Insurers do not intend to exclude top hospitals from their preferred network but, at the same time, they need to control their costs. This would benefit customers as well since higher claims lead to higher premiums. Both hospitals as well as insurers should realise that coming to an agreement will be mutually beneficial. Gradually, all of them will come onboard.
I don't think that hospitals are negatively affected by having package rates. Giving a standardised package rate makes the process easier. Hospitals can bill everything to a package and whenever a claim for a particular treatment is made, the hospital can check for the allowed limit and the discounts available. Moreover, it isn't possible to decide on a package without inputs from the medical community. So, these are not unilateral decisions by the health industry.
Would there have been more pressure on these hospitals if the private sector collaborated?
I believe so. PPN negotiations were started by General Insurance Public Sector Association (GIPSA) as public sector insurers were bleeding more than the private sector. The four PSUs-New India Insurance, National Insurance, United India Assurance and Oriental Insurance-have almost similar products. Therefore, it was much easier for them to collaborate. The private sector has a much younger customer base while PSUs have an aging portfolio and a wider geographic spread.
Government-owned general insurers control 60% of the health insurance market. Do you think not joining the PPN can affect these hospitals' business?
Cashless claims settlement is an additional facility. It is a convenient way for paying hospital bills. But that doesn't mean customers will not go to a particular hospital because cashless service is unavailable. They can always get bills reimbursed. So, businesses might not be affected but it may reduce the footfall or affect public perception of that hospital.
Are you seeing private sector insurers also re-negotiating the rates with hospitals now?
I think private sector insurers are also having a parallel negotiation process. If you ask me, the whole industry should have come together. After all, we are talking about the whole health insurance industry and a combined negotiation process would have increased buying power.
Some insurers have come up with their own claims settlement mechanisms, while PSU firms also plan to have a joint venture TPA. Do you think this is a threat to existing TPAs?
If in-house TPAs are successful, business would of course migrate from existing TPAs. However, the business is growing in itself as well and the migration would take place along with a growth in the pie. Therefore, even if one portion is transferred from my plate to yours, I won't starve as my plate is also growing simultaneously. I believe, as long as the TPAs are adding value to customers at the most efficient price, they won't face a survival risk.
