Health Insurance will change the Indian healthcare industry !

I recently attended the Health Insurance Summit 2007 organised by the CII ( Confederation of Indian Industry) in Bombay. This was the first conference on health insurance in India , and was quite an eye-opener ! It was sponsored by Swiss Re, and there were over 300 people in attendance. Such a good turnout means this is a “ hot area” which is attracting lots of interest.

The first thing which struck me was that not a single doctor was invited to give a lecture ! There were lots of MDs giving presentations, but most of these were doctors who were now working as managers in corporate hospitals. Doctors have become marginalized and are now inconsequential in the big-picture as far as the healthcare industry goes. I think this is true worldwide – and is becoming increasingly so in India. This is sad , because medicine is a service industry, and its foundation is the doctor-patient relationship. However , not only are patients not invited to participate, neither are doctors ! Policy decisions are made at “high levels” – and the doctor’s job today is just to implement them. It’s not surprising that so many doctors are burnt out and no longer want to practice medicine . Being a manager for a healthcare company or a HMO CEO is much more lucrative – and far easier ! Doctors are to blame for this state of affairs – we have abdicated our responsibility and have marginalized ourselves.

There were lots of very interesting presentations. Everyone wants to get into the business , because they see a huge money-making opportunity. Health insurance in India has now been opened upto the private sector; and it has been de-tariffed, allowing private companies to be innovative and design and sell clever new health insurance plans. What was formerly a loss-making business is now seen to be the “next big thing” in this field with the potential for health insurance being even bigger than life insurance ! When you count the huge number of Indians who earn a decent income because India is “shining” and income levels are rising; that healthcare insurance penetration at present is only 3-4 %; and that healthcare costs are going up rapidly, it’s simple mathematics to conclude that this is a huge billion dollar market waiting to be tapped ! The premia collected on health insurance policies has increased five-fold from Rs 675 crores in 2001 to Rs 3200 crores in 2006 – and this is just the beginning !

Health insurance will change the way healthcare is financed and delivered . Will this change be for the worse ? or the better ? Most probably, a bit of both, depending upon who you are and where you live ! It will help to provide 5 star care for rich Indians and enable corporate hospitals to attract patients from all over the world. What will happen to the poor in the villages ? Will they remain neglected ? Should medical care be determined by market forces ? or should it be a public service which the government provides ? This is a vexed issue . Even doctors are ambivalent about this, so it’s hardly surprising policy makers are confused too. Talking about 5-star care which exceed global standards and “ healthcare for all “ in the same breath makes both speaker and listener schizophrenic !

Yes, these are mind-boggling challenges , but what struck me was the huge amount of optimism and confidence that these can be met. Today, these are seen as opportunities – not as
problems ? Indians in 2007 have a “can-do” approach and are willing to take on the world. Being able to provide telecom services to practically every villager has been an inspiring ( and extremely profitable !) success story and many entrepreneurs are willing to duplicate this in other sectors which are equally lucrative.

I found it very interesting that the conference was sponsored by Swiss Re , one of the world’s largest reinsurance companies. Most doctors are blissfully unaware of the insurance business and cannot imaging the financial clout which reinsurance companies wield. Even though Swiss Re does not provide health insurance directly itself, it has a huge role to play in underwriting and enabling health insurance companies, which means that it is acting as a catalyst to shake up the entire sector !

The fact that health insurance will change the way healthcare is financed is a given. What I find even more intriguing is the possibility that it may change the doctor-patient relationship for the better as well. Health insurance companies have deep pockets – and they have a major incentive to want to educate patients. Not only does this provide them with a great return on investment ( by reducing unnecessary surgery and the claims ratio), it’s very useful as a marketing tool as well, since it’s a service patients value and want. Educated patients behave as consumers and ask questions and choose for themselves – they do not blindly follow doctor’s orders !

Which way are we headed ? Will we learn from the mistakes the US has made ? Or will we find ourselves in the same mess, because we are a capitalistic society too ? Will we move to “managed care” and HMOs because it’s much easier for MBAs to manage these – or will we have the creativity to craft our own path ?