Hospitalisation costs need to come down amid 'vengeance' hikes, insurers tell NITI Aayog

Health insurers-hospitals at loggerheads: Will a consensus emerge?

Non-life insurers and hospital sector executives met NITI Aayog officials, including member Vinod Paul, on October 28 to brainstorm over ways to make healthcare more affordable for Indians across cities and age-groups.

Health insurance companies raised concerns over “opaque pricing structures and inadequate disclosures by high-end hospitals and doctors," officials privy to the discussions told Moneycontrol.

Concerns over rising healthcare costs 

Insurance executives flagged steep rise in treatment costs, especially after the  Covid-19 pandemic. “It is becoming increasingly unaffordable. This has been a long-standing issue, but the rates shot up during Covid-19 and have continued to rise since then. Now, corporate hospitals seem to be hiking rates with a vengeance,” said an insurance industry official, who did not wish to be named. According to industry estimates, healthcare inflation in India is currently hovering between 12 and 14 per cent.

On their part, hospitals denied adopting unethical practices, including ‘surge or peak pricing’, where additional fees are allegedly levied for granting patients priority access to operation theatres, according to insurance industry officials.

“All that we are asking for is transparency and standardisation of some basic cost components and services. For example, within the same hospital, the costs of simple blood tests such as post prandial  [blood sugar check post meals] vary as per the room category chosen. Why should this be the case? After all, hospitals incur the same expenses for such straightforward blood tests, irrespective of the room type,” said an industry executive, who spoke on the condition of anonymity.

Also read: Efforts on to make health insurance more affordable, says IRDAI chief

Insurers-hospitals at loggerheads

Industry association General Insurance Council’s officials are also holding one-on-one dialogues with hospitals to bring the spiralling costs under control. “We will intensify our efforts to discuss these issues, including transparency and upfront cost disclosures with hospitals across the country. Hospitals are levying charges such as electricity, bedsheet-change, on-duty medical officers charges etc separately when these are ought to be part of the room rent,” said an insurance company official.

The other issue that the industry is looking for a solution to pertains to delays in discharge. “This is becoming a major issue. Even insurers have to introspect on this front. The Insurance Regulatory and Development Authority of India [IRDAI] rules say that discharge authorisation has to be given within three hours. However, either hospitals delay sending the bills or insurers take time to process the requests, causing inconvenience to patients,” said an insurance official.

In an interview with Moneycontrol earlier this year, Association of Healthcare Providers of India's (AHPI) Director-General Dr Girdhar Gyani had said that both hospitals and insurers have to be blamed for such situations. “Hospitals have to ensure that the pre-authorisation [insurers’ in-principle, initial approval for the estimated cost of treatment] is obtained carefully—there should not be a big difference between this estimate and the final bill. If the difference is substantial, then the insurer's TPA [third-party administrator] will take a longer time to approve the final claim,” he had said.

On their part, insurers should approve the settlement in case of minor differences. “In any case, at discharge, we obtain an undertaking from the patient, which makes it clear that they will be liable to make good the shortfall, if any, even after going home,” he had pointed out.

Also read: Standardisation of treatment rates will reduce undue charges, premium hikes: Bajaj Allianz CEO

The insurance industry is also pushing for the establishment of a body to regulate hospitals and other healthcare providers, as IRDAI can only regulate insurance companies.