health insurance & mananged care

8/8/2019 Health Insurance & Mananged Care

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Health Definition:Health is a state of complete

physical, mental & social well being

and not merely an absence ofdisease.

Good Health leads to productive life ,

social & emotional independence.Sound Body is essential for Sound

Mind.


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Health Influencing

Factors: Social ---

1.Community /Culture2.HealthInfrastructure

3.Basic Amenities

Personal ---1. Age

2.Gender

3. PersonalHygiene 4.Education

5. Family


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Healthy- UnhealthyWhen do we say someone is not healthy

When he is suffering from a disease

which requires -- Medication / SurgeryWhen he is suffering from risk factors 9like

stress,obesity,hypertension)which may laterlead to diseases like Heart Disease.


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Health - ImpactsDisease impacts you

Physically you require hospitals , doctors ,medicines etc.

Mentally you require social / familysupport

Financially - YOU REQUIRE MONEY

INSURANCE fills this gap


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Health Insurance :Financial mechanism in which people are protected against

catastrophic financial burden arising from unexpected illness or injury.

Having a well functioning Insurance system ensures pooling ofresources to cover risks.

Health is a human right , which has also been accepted in theconstitution wherein its accessibility & affordability has to be insured.


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Insurance purchase

driversShift from a savings society to a credit society

Nuclear families

Changing disease profiles life style diseaseslike Cancer & Cardiac account for nearly30% of in - patient ailments

Increasing cost of healthcare

Higher levels of good health consciousnessHigher confidence in service delivery


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Initiatives to promote Health

InsuranceInitiatives by the Government TAX BENEFITS

(80 D) in 08-09

Initiatives by Insurance Regulator Expandingdistribution by allowing Life Insurancecompanies to sell Health & setting up of stand

alone health insurance companies in 2004-05


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Types of Health

Insurance

Mass Health policies population / segmentcoverage

Corporate Health Cover Floater / Non

Floater

Retail Health policies Individual


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Scope of CoverDiseases / Injury

Treated medically / surgically

By hospitalization / Domiciliary hospitalization

At Nursing Home / hospital in India as In patient

Age Limit : 90 days 80 years


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Features of Health

InsuranceReimbursement system : Customers first

incur the expenses on services & later submitclaim to insurance company / TPA forReimbursement.

Cashless System : Third party

administrators play a key role in cashlesswherein the complete medical treatment isprovided as a part of credit facility to theinsured through their network Hospitals


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Compensation PayableReasonable & necessarily incurredRoom expenses in Hospital / Nursing Home

Nursing expenses

Medical Practitioner fee

Pre& Post Hospitalization expenses

Max up to Sum Insured

Treatment Cost Medicines Blood / oxygen Cost of pace maker / Artificial limbs / cost of organs Operation theatre charges Surgical appliances Diagnostic Cost Dialysis / Chemotherapy / Radiotherapy


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TerminologyHospital / Nursing Home

Institution in India for Indoor care

For treatment of Sickness & InjuriesRegistered with local authorities

Supervision of Medical practitionerMINIMUM criteria for Hospital

Min 15 in-Patient bedsMin 10 when population < 1 million

Fully equipped functional operation theatre

Round the clock availability of Nursing Staff / Doctor


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Terminology 2 Institutions which are not Hospitals

Place of rest

Old age home

De-addiction centersHotel & similar institutions

HOSPITALIZATION:

Min period of 24 hrsTime limit is not applicable for specific treatment (Day

Care) ---- Dialysis , Chemotherapy ,Tonsillectomy , Daycare , Eye Surgery , Dental Surgery


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Terminology 3Pre Hospitalization:

Relevant medical expenses 30 days prior tohospitalization

Post Hospitalization: Relevant medical expenses 60 days after

hospitalization

Any One Illness :Continued period of illness

Relapse within 45 days of the earlier treatment


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Terminology4Domiciliary HospitalizationTreatment exceeding 3 days at Residence Serious condition of patient does not allow removal to

hospital

Lack of accommodation in nursing home

Pre / post hospitalization expenses not covered

Specified diseases excluded

Asthma

DiabetesDysentery

Hypertension

Flu

Epilepsy

Arthritis


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Terminology .5Medical PractitionerPhysician, Specialist, Surgeon and Anesthetist

Holds a degree /diploma of recognized institute

registered by Medical Council of the State

Surgical Operation

Manual operative procedure forDeformity

Defect correction

Diagnosis cure

Prolongation of file


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First year exclusionsCataract

Benign prostatic hypertrophy

Hysterectomy for menorrahagia orfibromyoma

Hernia / Hydrocele

Congenital internal disease

Fistula in anus / piles

Sinusitis & related disorder


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Standard Exclusions:War / War GroupNuclear Perils

Plastic / Cosmetic Surgery

Spectacles / Contact lens / hearing aidDental treatment

Use of Alcohol

AIDS

Diagnostic / Laboratory expenses not consistent withtreatment

Vitamins / Tonic inconsistent with treatment

Pregnancy

Naturopathy


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Add on CoversPregnancy

9 months from inception

Pre & post natal care not covered

Max Liability Rs 50 k

First two children

Abortion within 12 weeks not covered

Baby expenses cover from day one

Critical illness cover on Floater basis

Pre existing disease


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Indian Health care

SystemCharacterized by Multiple systems ofmedicine , mixed ownership patterns &different kinds of delivery structure.

Two sectors provide healthcare in India Public & private. Bulk of curative services isskewed towards the urban areas &dominated by the private sector.

Govt. by its budgetary allocations has set upimpressive health infrastructure butavailability & accessibility is facing seriouschallenges in meeting its objectives.


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Public health SectorMedical care is provided through govt. run

hospitals , dispensaries ,PHCs, subcentres.

Primary care is provided at dispensaries & healthcenters where basic medical treatment is given.

Secondary care is provided by specialists atdistrict, sub divisional & community healthcenters.

Tertiary care is provided at multi & superspecialty hospitals & medical colleges.


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Private Health SectorConsists of organized private & voluntary

institutions contributing to managed health

care & is primarily profit oriented.Include all levels of private hospitals ;

dispensaries ; general practitioners;Nursing homes & pharmacy etc.

Utilization of services is more in this sectordue to concern about the quality in publicservices.


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Health Care DeliveryPrimary Health Care treatment on out

patient basis

Secondary Health Care Hospitalizationtreatment for non critical illness

Tertiary Health Care Hospitalizationtreatment for critical ailmentsrequiring hightech expensive facilities & equipments


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Existing Schemes in IndiaVoluntary health insurance schemes or

private for profit schemes.

Employer based schemes.

Insurance offered by NGOs / communitybased health insurance.

Mandatory Health insurance schemes orgovt. run schemes (namely ESIC / CGHS).


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Healthcare challenges

in IndiaIncreasing health care costsHigh financial burden on poor eroding their incomesLack of a system to maintain proper medical statistics &

accessing the sameIncreasing burden of new diseases & health risks

Neglect of preventive & primary care & public healthfunctions due to under funding of govt. health care.Needs statistics to base their pricing on sound actuarial

principle age group wise ; gender wise ; disease wise &geographical location wise. Also the probability of fallingsick & average length of stay in hospital has to beevaluated

Alternative is Social health Insurance through co-operatives; associations & Unions.


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Role of InsurerShould play an active or passive role in

provision of healthcare services.

Should not act as merely a funding entity as

controlling costs become difficult.Develop cost sharing mechanisms to mitigate

the negative impacts of insurance Copay ordeductibles.

Another way is to get directly involved inorganizing & providing healthcare services MANAGED CARE.


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Regulation of TPAsIRDA has approved services of TPAs as

Insurance intermediaries(2001)

IRDA has drawn up a code of conductfor the TPAs & put stringent conditionsfor licensing

Assure cashless hospitalization facility

with increased accessibility tohealthcare.

TPAs are not allowed to market healthinsurance.


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Training of TPAsTPA is a complex organization.. Must

have trained managerial staff to address

various complexities.Should be able to handle sensitive

customer service requirements.

Complete financial management &specialty/technical/medical knowledgeto robust information technology.


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Characteristics of

healthcare provisionUnregulated private medical sector a critical issue in

quality of healthcare.

Lack of standardization for hospitals makes the

concern of pricing & billing serious.Managed care organization bargain for better prices

& discounts by providing volume business.

Diversity of providers & absence of uniform standards& inadequate information on disease management

with costs going high are challenging tasks.


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Risks & IssuesTPAs are paid a fixed percentage of the policy

premium. Role in controlling costs with focus onprevention & promotive services can control the costs.

TPAs can play a role in educating the variousexclusion clauses & conditions of the policy to policyholders.

Serious challenge in mitigating negative consequencesof health insurance & malpractices.

Payment reckons issues with TPA & healthcareproviders .


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Types of InsuranceInsurance can be termed as a form of risk managementwhich is mainly used to protect an individual against the riskof prospective financial loss, if any. Insurance can be used asa tool to shield an individual against potential risks like travelaccidents, death, unemployment, theft, property destruction

by natural calamities, fire mishaps etc.

Different types of insurance is used to cover differentproperties and assets such as vehicles, home, health careetc. Basically, an insurance policy can also be known as aprotection net which secures you from any financial losses in

future


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Health Insurance Types

Health insurance can be broken down into twobroad categories: Traditional and Managed care.

There are four basic types of plans:

-- Traditional indemnity plans, which are nowoften called fee-for-service plans;

-- PPO, or Preferred Provider Organizations;

-- POS, or Point-Of-Service plans;

-- HMOs, or Health Maintenance Organizations.


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InsuranceUp until about 30 years ago, most people had

traditional indemnity coverage. These days, it's oftenknown as "fee-for-service." Indemnity plans are a bitlike auto insurance: you pay a certain amount of yourmedical expenses up front in the form of a deductibleand afterward the insurance company pays the

majority of the bill.Advances in modern medicine increased the cost of

providing health care and made it possible for peopleto live longer. Those advances caused many insurancecompanies to look for ways to reduce their costs of

doing business, giving managed care the boost itenjoys today.


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Fee-for-service

Under this type of health coverage, you have completeautonomy when it comes to choosing doctors, hospitalsand other health care providers. You can refer yourselfto any specialist without getting permission, and theinsurance company doesn't get to decide whether thevisit was necessary.

Under fee-for-service plans, insurers will usually onlypay for reasonable and customary" medical expenses,taking into account what other practitioners in the areacharge for similar services. If your doctor happens tocharge more than what the insurance company

considers "reasonable and customary," you'll probablyhave to make up the difference yourself.


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Managed careAll managed care plans involve an arrangement

between the insurer and a selected network ofhealth care providers, and they offerpolicyholders significant financial incentives touse the providers in that network. There are

usually explicit standards for selecting providersand a formal procedure to assure quality care.

the majority of people with private healthinsurance have some type of managed care.


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Preferred Provider

Organizations (PPOs)One step over the managed care border is the

Preferred Provider Organization. PPOs have madearrangements for lower fees with a network ofhealth care providers. PPOs give their policyholdersa financial incentive to stay within that network.

Staying within the network means less moneycoming out of your pocket and less paperwork.

Preventive care services may not be covered undera PPO.


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Point-of-Service (POS)Point-of-service plans are similar to PPOs, but they

introduce the gatekeeper, or Primary CarePhysician. You'll need to choose your PCP fromamong the plan's network of doctors.

POS plans may also cover more preventive careservices, and may even offer health improvementprograms like workshops on nutrition and smokingcessation, and discounts at health clubs.


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Health Maintenance

Organizations (HMOs)HMOs -- the least expensive, but least flexible

type of health plan. They also tend to be

geared more toward members of group plansthan individuals.

In general, you must see HMO-approvedphysicians or pay the entire cost of the visit

yourself. HMOs have the best reputation forcovering preventive care services and healthimprovement programs


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