Tuesday, September 30, 2014

Why don't Indian health insurers invest in patient education ?

The Indian health insurance industry is at a crossroads today . It’s been growing at a scorching pace in the last few years, and health is likely to become a huge part of the portfolio of general insurance companies. However, even though the demand has been rising exponentially , no health insurer seems to be making a profit today.

Demand is booming because healthcare is becoming more expensive , and Indians are increasingly aware that they need to buy health insurance to protect themselves when they fall ill. This is a hot area and lots of global health insurers are itching to get into India because the potential market is so promising.

So why are health insurers still bleeding money ? In the past, health insurance was a monopoly which only government companies could provide . It used to be a loss leader, and the premium which the companies charged was completely out of touch with reality , and they were quite willing to lose money on this segment of their portfolio. Even today, after privatization, the claims loss ratios are very high, partly because of the historical hangover ; partly because we still don't have reliable actuarial data on which health insurers can intelligently price their policies; and because the market is so competitive.

This situation has become untenable, as a result of which some private health insurance companies have stopped selling group ( corporate) health insurance policies, because it’s not cost effective for them to do so . This is an interesting paradox - how can you reconcile the fact that over the long term you will end up making lots of money , but in the short term you are still hemorrhaging ?

I think the solution is simple – health insurers need to invest in educating their customers. Patient education has worked extremely well abroad, and this is something which insurers proactively and routinely do all over the world. They understand that this is their best defense against the problems of over testing and overtreatment , which is causing medical costs to spiral out of control. The best way to help patients avoid unnecessary surgery is by making sure patients understand what their options are, so that they make well-informed decisions , and doctors are no longer able to bully them into doing expensive and unnecessary surgical procedures .

Avoidable care has become an epidemic today, because doctors are economically incentivised to perform as many procedures as possible. They don’t get paid to counsel the patient or to be conservative, even if the “do nothing” option is in the patient’s best interests.  If the doctor tells you to do something, most patients will not have the guts to challenge him – they will meekly sign the consent form on the way to the Operation Theater.

This is why Information Therapy needs to be delivered proactively – even before the patient has met the doctor. This will allow him to ask intelligent questions , and he can push back if the doctor advises aggressive treatment which doesn't seem reasonable , according to evidence-based medicine guidelines. This information will also allow him to verify whether his doctor’s advise conforms to established medical practice; and if it does not, he can think of getting a second opinion from a better doctors.

This is why patient education should be an integral part of the health insurer’s business model – it makes business sense for them to prescribe Information Therapy. Not only will it help them to become more profitable more quickly by reducing their claims loss ratio , it will also help them to create a positive customer experience .

If the value of providing patient education is so obvious , then why don't health insurers in India do this ? I have come across multiple excuses so far.

  • We are not in patient education business
  • This is not our core competence
  • Patient education is something which doctors should be doing
  • We don't want to get involved in the disease management space
  • We don't want to second-guess the doctor
  • A lot of this information is so easily available on Google and Wikipedia , so why should be offer it
  • If the information we provide is inaccurate , we  may get sued and we don’t want to take on this additional liability
  • I do not have the budget to do so
  • I need IRDA approval to do this
  • Most of my customers do not have internet access
  • Most of my customers cannot read English

The tragedy is that none of these are good reasons ! They are all flimsy excuses, all of which can be solved , if there is the will to do so.  What amazes me is that health insurers continue to be shortsighted , and go on continue wasting a lot of money unnecessarily . I just hope they wake up and understand why patient education should become an integral part of their offering , before they have to fold or lose their customers to other health insurers who understand that not only is patient education good for their business , it’s good for the health of their customers !


  1. Anonymous1:33 PM

    Hi Doc, today is the 9th day after 3 day embryo transfer and HPT says negative. Is it truly over? Denni

  2. I agree this is worrisome :(

    However, HPTs are not always reliable and can give false negative results. a beta HCG blood test is much more reliable

    1. Anonymous3:24 PM

      Thanks for your reply Doc !blood test appointment is on Sunday the 5th that is in 5 days. I guess I will wait till then. Still haven't seen my period and am generally weak these days. Denni

  3. I do agree with you, today whenever you fall ill and some disease or anything get diagnose doctor immediately suggest surgery but if the illness is not at last stage and can be recover without surgery i think this option should be suggested and if health insurers start this of service it will be appreciated by all.


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