Sunday, August 10, 2014

The problem with Indian health insurance group policies

Over 50% of health insurance policies sold in India today are "group health " policies which corporates buy. These are a perquisite they provide as a benefit to their employees , in order to help them with their medical care bills, in case they fall ill.

Companies understand that they need to invest in their employees, and that health employees are more productive. After all, one of their most important resources is their human capital.

However, with rampant medical inflation, many are  finding it hard to foot the bill. They  are trying to squeeze the insurers by forcing them to provide more benefits at the same costs. However , this is not working , as insurers are bleeding because of high claims loss ratios. This is not sustainable, and the system is broken.

 Christensen Clayton has an interesting perspective on this problem.

The problem, he says, is that employers are approaching this problem the wrong way. They assume their employees have skin in the game.
“People don’t actually want to think about their own health and don’t take action until they are sick,” he said. “Yet employers are very motivated to get their employees healthy, since they bear most of the burden of their health care costs. In response, they spend thousands of dollars per employee each year trying to get them to be healthier with little to show for the investment. And as a result, many employers think they want to get totally out of the system of paying health care costs. That’s wrong too. We’re pushing the wrong levers.”


http://www.forbes.com/sites/robertpearl/2014/07/10/clayton-christensen-american-health-care-is-sick-and-getting-sicker/3/

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