Health Definition:

Health is a state of complete

physical, mental & social well being
and not merely an absence of
disease.
Good Health leads to productive life ,
social & emotional independence.
Sound Body is essential for Sound
Mind.
Health Influencing
Factors:
 Social ---  Personal ---
1. Age
2.
1.Community / Gender
Culture 3. Personal
2.Health Hygiene 4.
Infrastructure Education
3.Basic Amenities 5. Family
Healthy- Unhealthy
When do we say – someone is not healthy
When he is suffering from a disease
which requires -- Medication / Surgery
When he is suffering from risk factors 9like
stress,obesity,hypertension)which may later
lead to diseases like Heart Disease.
Health - Impacts
Disease impacts you

 Physically – you require hospitals , doctors ,

medicines etc.
 Mentally– you require social / family
support
 Financially - YOU REQUIRE MONEY

INSURANCE fills this gap

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 of
resources to cover risks.
Health is a human right , which has also been accepted in the
constitution wherein its accessibility & affordability has to be insured.
Insurance purchase
drivers
Shift from a savings society to a credit society
Nuclear families
Changing disease profiles – life style diseases
like Cancer & Cardiac account for nearly
30% of in - patient ailments
Increasing cost of healthcare
Higher levels of good health consciousness
Higher confidence in service delivery
Initiatives to promote Health
Insurance
Initiatives by the Government – TAX BENEFITS
(80 D) in 08-09

Initiatives by Insurance Regulator – Expanding

distribution by allowing Life Insurance
companies to sell Health & setting up of stand
alone health insurance companies in 2004-05
Types of Health
Insurance

 Mass Health policies – population / segment

coverage

 Corporate Health Cover – Floater / Non

Floater

 Retail Health policies – Individual

Scope of Cover
Diseases / Injury
 Treated medically / surgically
 By hospitalization / Domiciliary hospitalization

 At Nursing Home / hospital in India as In – patient

Age Limit : 90 days – 80 years

Features of Health
Insurance
Reimbursement system : Customers first
incur the expenses on services & later submit
claim to insurance company / TPA for
Reimbursement.

Cashless System : Third party

administrators play a key role in cashless
wherein the complete medical treatment is
provided as a part of credit facility to the
insured through their network Hospitals
Compensation Payable
 Reasonable & necessarily incurred
 Room 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
Terminology
Hospital / Nursing Home
Institution in India for Indoor care
For treatment of Sickness & Injuries
Registered with local authorities
Supervision of Medical practitioner
 MINIMUM criteria for Hospital
 Min 15 in-Patient beds

 Min 10 when population < 1 million

 Fully equipped functional operation theatre

 Round the clock availability of Nursing Staff / Doctor

Terminology …2
 Institutions which are not Hospitals
 Place of rest
 Old age home
 De-addiction centers
 Hotel & similar institutions

HOSPITALIZATION:
 Min period of 24 hrs
 Time limit is not applicable for specific treatment (Day
Care) ---- Dialysis , Chemotherapy ,Tonsillectomy , Day
care , Eye Surgery , Dental Surgery
Terminology …3
Pre Hospitalization:
Relevant medical expenses 30 days prior to
hospitalization

Post Hospitalization:
 Relevant medical expenses 60 days after
hospitalization

 Any One Illness :

 Continued period of illness

 Relapse within 45 days of the earlier treatment

Terminology…4
Domiciliary Hospitalization
 Treatment 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

 Diabetes

 Dysentery

 Hypertension

 Flu

 Epilepsy

 Arthritis
Terminology ….5
Medical Practitioner
Physician, Specialist, Surgeon and Anesthetist
Holds a degree /diploma of recognized institute
registered by Medical Council of the State
Surgical Operation
Manual operative procedure for
 Deformity
 Defect correction

 Diagnosis cure

 Prolongation of file
First year exclusions
Cataract
Benign prostatic hypertrophy
Hysterectomy for menorrahagia or
fibromyoma
Hernia / Hydrocele
Congenital internal disease
Fistula in anus / piles
Sinusitis & related disorder
Standard Exclusions:
 War / War Group
 Nuclear Perils
 Plastic / Cosmetic Surgery
 Spectacles / Contact lens / hearing aid
 Dental treatment
 Use of Alcohol
 AIDS
 Diagnostic / Laboratory expenses not consistent with
treatment
 Vitamins / Tonic inconsistent with treatment
 Pregnancy
 Naturopathy
Add on Covers
Pregnancy
 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
Indian Health care
System
Characterized by Multiple systems of
medicine , mixed ownership patterns &
different kinds of delivery structure.
Two sectors provide healthcare in India –
Public & private. Bulk of curative services is
skewed towards the urban areas &
dominated by the private sector.
Govt. by its budgetary allocations has set up
impressive health infrastructure but
availability & accessibility is facing serious
challenges in meeting its objectives.
Public health Sector
Medical care is provided through govt. run
hospitals , dispensaries ,PHC’s, subcentres.
Primary care is provided at dispensaries & health
centers where basic medical treatment is given.
Secondary care is provided by specialists at
district, sub divisional & community health
centers.
Tertiary care is provided at multi & super
specialty hospitals & medical colleges.
Private Health Sector
Consists 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 sector
due to concern about the quality in public
services.
Health Care Delivery
Primary Health Care – treatment on out
patient basis

Secondary Health Care – Hospitalization

treatment for non critical illness

Tertiary Health Care – Hospitalization

treatment for critical ailments…requiring high
tech expensive facilities & equipments
Existing Schemes in India
Voluntary health insurance schemes or
private for profit schemes.
Employer based schemes.
Insurance offered by NGO’s / community
based health insurance.
Mandatory Health insurance schemes or
govt. run schemes (namely ESIC / CGHS).
Healthcare challenges
in India
Increasing health care costs
High financial burden on poor eroding their incomes
Lack of a system to maintain proper medical statistics &
accessing the same
Increasing burden of new diseases & health risks
Neglect of preventive & primary care & public health
functions 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 falling
sick & average length of stay in hospital has to be
evaluated
Alternative is Social health Insurance through co-operatives
; associations & Unions.
Role of Insurer
Should 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 or
deductibles.
Another way is to get directly involved in
organizing & providing healthcare services –
MANAGED CARE.
Regulation of TPA’s
IRDA has approved services of TPA’s as
Insurance intermediaries(2001)
IRDA has drawn up a code of conduct
for the TPA’s & put stringent conditions
for licensing
Assure cashless hospitalization facility
with increased accessibility to
healthcare.
TPA’s are not allowed to market health
insurance.
Training of TPA’s
TPA 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 knowledge
to robust information technology.
Characteristics of
healthcare provision
Unregulated 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.
Risks & Issues
TPA’s are paid a fixed percentage of the policy
premium. Role in controlling costs with focus on
prevention & promotive services can control the costs.
TPA’s can play a role in educating the various
exclusion clauses & conditions of the policy to policy
holders.
Serious challenge in mitigating negative consequences
of health insurance & malpractices.
Payment reckons issues with TPA & healthcare
providers .
Types of Insurance
Insurance can be termed as a form of risk management
which is mainly used to protect an individual against the risk
of prospective financial loss, if any. Insurance can be used as
a tool to shield an individual against potential risks like travel
accidents, death, unemployment, theft, property destruction
by natural calamities, fire mishaps etc.

Different types of insurance is used to cover different

properties and assets such as vehicles, home, health care
etc. Basically, an insurance policy can also be known as a
protection net which secures you from any financial losses in
future
Health Insurance Types
Health insurance can be broken down into two
broad categories: Traditional and Managed care.
There are four basic types of plans:
-- Traditional indemnity plans, which are now
often called fee-for-service plans;
-- PPO, or Preferred Provider Organizations;
-- POS, or Point-Of-Service plans;
-- HMOs, or Health Maintenance Organizations.
Traditional Health
Insurance
Up until about 30 years ago, most people had
traditional indemnity coverage. These days, it's often
known as "fee-for-service." Indemnity plans are a bit
like auto insurance: you pay a certain amount of your
medical expenses up front in the form of a deductible
and 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 people
to live longer. Those advances caused many insurance
companies to look for ways to reduce their costs of
doing business, giving managed care the boost it
enjoys today.
Fee-for-service
Under this type of health coverage, you have complete
autonomy when it comes to choosing doctors, hospitals
and other health care providers. You can refer yourself
to any specialist without getting permission, and the
insurance company doesn't get to decide whether the
visit was necessary.
Under fee-for-service plans, insurers will usually only
pay for reasonable and customary" medical expenses,
taking into account what other practitioners in the area
charge for similar services. If your doctor happens to
charge more than what the insurance company
considers "reasonable and customary," you'll probably
have to make up the difference yourself.
Managed care
All managed care plans involve an arrangement
between the insurer and a selected network of
health care providers, and they offer
policyholders significant financial incentives to
use the providers in that network. There are
usually explicit standards for selecting providers
and a formal procedure to assure quality care.
the majority of people with private health
insurance have some type of managed care.
Preferred Provider
Organizations (PPOs)
One step over the managed care border is the
Preferred Provider Organization. PPOs have made
arrangements for lower fees with a network of
health care providers. PPOs give their policyholders
a financial incentive to stay within that network.
Staying within the network means less money
coming out of your pocket and less paperwork.
Preventive care services may not be covered under
a PPO.
Point-of-Service (POS)
Point-of-service plans are similar to PPOs, but they
introduce the gatekeeper, or Primary Care
Physician. You'll need to choose your PCP from
among the plan's network of doctors.
POS plans may also cover more preventive care
services, and may even offer health improvement
programs like workshops on nutrition and smoking
cessation, and discounts at health clubs.
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 plans
than individuals.
In general, you must see HMO-approved
physicians or pay the entire cost of the visit
yourself. HMOs have the best reputation for
covering preventive care services and health
improvement programs