Tuesday, May 20, 2014

Health insurance companies versus doctors

Health insurance companies  and doctors ( which includes the hospitals which employ these doctors) seem to be headed on a collision course in India today. This is an ugly situation which seems to be getting progressively worse , because of the confrontation which seems to be occurring on a daily basis over the reimbursement of patients’ medical expenses when they submit their claims to their health insurance company.

When patients have a health insurance policy and undergo medical treatment, they expect that the insurance company will pay for their medical care.  After all, this is why they took out the insurance policy in the first place !

This is why many hospitals will do the surgery for patients with insurance coverage in good faith, and will not insist on being paid in advance. When the surgery is complete, they submit the claim to the insurance company  and expect them to reimburse this promptly. However, when insurance companies refuse to do so , on what seems to be a flimsy pretext ( such as an incompletely filled form), hospital managements start feeling that  insurance companies are crooked because they want to hang on the float by refusing to clear their payment.

Hospitals believe that insurance companies are using these excuses to delay payment , in order to maximize their own profits . Not only does this cause a lot of heartburn for hospitals, they find that they then need to start employing a small army of clerks to keep up with the games the insurance companies play.

Doctors and hospitals often cannot afford to deal with all this paperwork , which distracts them from providing high quality care to their patients. They are just not equipped to deal with the bureaucratic hurdles the insurance company makes them jump through, and many will just give up on the claim and write it off. However , they will stop accepting insured patients in the future, and will insist on being paid in advance ! This harms the poor patient.

Insurance companies are quite happy to swamp doctors with lots of paperwork , because they can easily afford to do so . Hospitals , on the other hand , are in the business of taking care of patients , and when they find they have to waste so much energy and time in getting insurance companies to pay their dues, they get upset and agitated .

However, we also need to look at this from the insurance company’s perspective. Insurance company executives think of themselves as being in the service of reducing financial risk for their customers. They are happy to provide a financial safety net when the patient falls ill , and take pride in processing clean claims promptly. They treat their customers as valued clients, and understand that because health insurance is a competitive market, the better the service they provide to their customers, the more they will profit.

The problem is that they perceive many doctors and hospitals as being crooked . It is true that there are a few bad eggs in the medical profession, and hospitals and insurance agents will often conspire to cheat the health insurance company. The insurance company is seen as having deep pockets, and they will commit outright fraud, by submitting inflated claims; and even completely false claims, by claiming to have done surgery on non-existent patients !

Insurance company executives are not stupid. They know that many hospitals and doctors pad their bills and overcharge insured patients . They find the lack of transparency on the part of hospitals extremely infuriating . How can hospitals charge one patients Rs 20000 for a cataract surgery, while the other one is asked to pay Rs 100000 , just because he is insured ?  Hospital bills are designed to be complex and opaque – and this lack of transparency makes it very difficult for insurance companies to be able to model their business. Even worse, they know that lots of doctors do a lot of unnecessary testing and surgery , just because the patient is covered by insurance. Doctors used to be able to get away with these kind of malpractices in the past, when insurance companies used to turn a blind eye to them , because the amounts were small. However, as medical inflation is pushing healthcare costs through the roof, insurance companies are pushing back . In this confrontation , it is usually the innocent patient who suffers ; and it's often the good doctors who are unfairly penalized , as the insurance companies turn on the screws and make their processes ever more stringent, in order to cut down fraud.

This situation is likely to far uglier before it improves. Health insurance companies and doctors often seem to be worlds apart, and they find it difficult to seek common ground. Doctors think of insurance company executives as being office bound pen-pushers , who don’t have a heart , and don’t understand the complexities of real life medicine. They believe that all insurance companies understand is paperwork. Insurance executives think of doctors as being money hungry crooks, who are out to make a quick buck at the expense of the company. Each of them remembers only the exceptions . Thus, insurance company executives discuss the crooked hospital which was caught cheating and siphoning off crores , by claiming to do surgery for patients who were never even admitted; while hospitals complain about the insurance company which refused to pay for a clean claim, just because the forms were not submitted within 7 days  !

My fear is that we seem to be headed down the route of the US healthcare system, where the payers and providers seems to be locked in fighting an ongoing battle, which gets uglier year after year.

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