Standard Treatment Norms on Cards

Both the health insurance and healthcare industry seem to be converging on the need for standardising treatment protocols with cost indicators and a combined group is ready with 20 most common surgical procedures and medical conditions.

As hospitals do not follow any ailment-specific treatment processes, the absence of a standard treatment protocol has often led to vast differences in treatment procedures and consequent costs for seemingly identical ailments across hospitals. This situation has increasingly led the health insurance industry and healthcare providers being at cross roads as instances of over treatment or more than necessary diagnostic testing for insured patients have been on the rise.

Industry body Ficci, in consultation with heath insurance companies and healthcare providers such as Aiims, Medanta, Arvind Eye Care and Narayana Hrudayalaya, has developed a list of ‘standardised treatment protocols and cost indicators’ for 20 common procedures and medical conditions.

“This has been prepared. Based on its acceptance, the effort could be channelised to cover 50 surgical procedures. We were in touch with the health ministry and Insurance Regulatory Development Authority on the issue. The list will be submitted to the health ministry in the next four-six weeks,” said Narottam Puri, advisor, Ficci Health Services Committee and chairman, National Accreditation Board for Hospitals & Healthcare Providers.

Experts also point out that this list is a notable progress from the point of view of cost standardisation and could be expected to reign in arbitrary treatment costs. Eventually, one of the favourable impacts could be on the adverse claims ratio and related outgo for the health insurance industry, which collected around Rs 11,000 crore as premium last year.

According to a new report by Foundation of Research, Training and Education in Insurance, an initiative of Ficci and ING Insurance, general insurers have a deficit of Rs 6 for every Rs 100 collected as premium because administrative cost collection, agent commission and third party administrator fees as well as claim pay-outs account cost around Rs 106. Plus, claims payout ratio at an industry-level is around 100-150 per cent, which means insurers pay more claims than the premium collected.

Puri added the initial list contains treatment protocols with cost indicators for cataract, respiratory ailments, diabetes and specific forms of cancer. After the documents are submitted, health ministry officials along with a team of renowned doctors are expected to consider the issue and draw up a standard.

“If this gains ground, private hospitals and health insurance could settle mediclaim easily. Though finalising the standardised protocols is not an easy task as both diseases and their treatment depend on individuals, but this is a good move,” said Antony Jacob, CEO of Apollo Munich Insurance and co-chairman, Ficci advisory group on Health Insurance.