Wednesday, June 18, 2014

The health insurance industry is sick

Customers buy health insurance so that when they fall ill, they do not have to worry about the cost of their medical care . One would expect that their health insurers would do their best to help their patients to get better , but once you get admitted into hospital , unfortunately the ground reality is completely different. Health insurance companies spend a lot of money in advertising how great their service is and how useful their policies are in case of an illness. However, the real-life experience which patients and doctors have with health insurance is completely different .

There are many reasons for this , and one of them is the fact that most health insurance companies think that doctors and hospitals are crooks. They have lost so much money thanks to medical fraud perpetrated by healthcare providers), in the form of inflated medical bills and fictitious claims for operations performed on non-existent patients , that insurance companies don't trust doctors or hospitals anymore .

Sadly, it is the good doctors who are harmed the most as a result of this lack of trust . Their legitimate claims are often denied; or payment is held up or delayed, because insurance companies have introduced so many checks in order to prevent fraud and protect themselves. These serve as additional friction points , which serve to frustrate genuine customers .

Thus, hospitals often find that payments are delayed; and patients are often angry and upset that their claim is rejected simply because of a clerical error in submitting the form !

Even worse, an unintended consequence of this safeguard is that it harms the quality of medical care patients receive. For example, insurance companies insist that patient's submit their original hospital and medical records with their claim, when they want reimbursement . The problem is that the company will often sit on these records for long periods of time. As a result, when the patient needs to go for a follow-up visit or get a second opinion , the poor patient does not have her original medical records ! I think this is ridiculous ! Medical records are the property of the patient and it’s not right that the health insurance company keep them. The reality is that they often do so for extended periods of time, while “processing the claim”, and is extremely unfair on patients as well as their doctors , who have been denied access to valuable information which they need to treat the patients.

Health insurance companies have become lumbering dysfunctional bureaucratic organizations which have still not learned how to put their customers first . The good news is that this is an extremely fixable problem , using technology. In the USA , the insurance company does not ask for the original patient records . Indian companies continue to do so because they've been doing it for many years , and have been getting away with it . It’s high time they started using technology cleverly, to provide better customer service and expedite claim processing. An efficient way of doing this would be providing patients with their online electronic personal health record . Since these are online, submitting and processing these would be frictionless. Not only would it make the patient’s life a lot easier, it would also help to reduce transaction costs for the company, and would also help to prevent fraud, because auditing claims is much easier when it’s done electronically.

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