Health Insurance Expected To Cross 4-4.5 Lakh Cr In Gross Written Premiums By 2030: Star Health's Dr S Prakash
Health insurance awareness has considerably grown post-pandemic with more people shelling out money to buy a cover for themselves or their loved ones, Dr S Prakash, MD, Star Health and Allied Insurance told BW Healthcare World that people now have a fear of healthcare costs and this has pushed people to buy insurance policies. Whereas on the insurance side, things have been quite positive he said, and the industry is developing resilience against emergencies such as the pandemic, offering continuity of services, and involving technology to deliver the same.
Edited Excerpts:
How do you think the health insurance sector is growing in the last few years?
The industry is growing at a compounded annual growth rate of 20.26 per cent in the last 6-7 years and with the same growth, the overall gross written premium for health is expected to be around 90,000 crores this year. Further given the same momentum, this is expected to cross 4-4.5 lakhs by 2030. The drivers of this growth are rising life expectancy, per capita growth, financial literacy, medical advancements and also medical awareness.
People today want to safeguard their investments and hence more people are opting to have insurance which can be collateral security for their investments. With this industry growth, Star Health is also growing positively in retail because we focus more on retail business. The retail health insurance segment only caters to 4 per cent of the people in India and there is a lot of potential for growth. In the retail segment, Star Health has 33 per cent of the market share and our growth in this segment is steadily growing above the industry average in the last few years.
What has been the idea or the strategy for partnering with the hospitals for Star Health?
We started Star Health by saying that we are going to be an insurance company where we want to design the policy and we also want to deliver the services. We don't want to engage a third party to transact the claim. We have a team who works with our technology platforms with fixed guidelines, and we offer the best of services so that no genuine customers have disappointment. We also educate medical professionals with all our policy terms.
We are a company which has strong provider engagement. We talk to the hospitals not only for claims but also to do periodic continuing medical education programs. If there is a pandemic or an influenza outbreak, we call them and tell them, these are the guidelines to be followed.
When can we expect OPD services under the standard health policies from the industry?
If you see, initially health insurance used to pay only for reimbursements and then came cashless payments and now one doesn't have to spend 24 hours in a hospital and can get a claim for daycare procedures as well.
Now the next step is covering OPDs patients, like for example, Star Health has now started covering mental ailments as mental ailments are covered mostly as OPD services. So going forward we want to enter the field of OPD services, study the pros and cons and create a very strong technology platform so that the OPD claims are approved automatically.
At the same time, we have to track how many patients are converting unnecessarily to inpatients and how many are given scientific and ethical services. We will also have to look at the sustainability of such a policy and ensure that it does not incur huge losses to the insurers. Most of the OPD services can be delivered at home which can be supervised by telemedicine services. Hence, we have to study this and come up with a sustainable policy.
In the West maternity care is covered by health insurance. Why are we not covering it?
In the West, insurance is for protection. But here unfortunately some people take it as an entitlement. They know that they are going to be pregnant and then they take a policy. In this case, I have to assess my risk based on covering the normal population, not people who know that they are going to have a claim. Once we have more people covered then economies of scale can come into the picture and insurance companies can cover things such as artificial reconstruction techniques or delivery expenses.
Studies say insurance frauds have risen post pandemic, what is your experience with this and how do you plan to tackle it?
Yes, studies demonstrate an increase in insurance fraud, but I want to ask you, what is fraud? If somebody is having a fake document, report or an impersonation or hospital generating all these bills without functioning, these are all big frauds. But If someone is admitting a patient to an ICU when ICU is not really required or keeps the patient for a long time, and charges more or prescribes a high-end antibiotic because he is getting a better return on investment. Now would you call this commercialisation or fraud? Fraud has to be mitigated, whereas commercialisation has to be regulated.
First, we have to categorise them, today, there are hospitals which are ethical but are not recognised and there are also hospitals which are commercial. We are trying to create a technology system that can identify those who are commercial, those who are absolute frauds and those who are ethical. And on that, we will have a scoring index for the hospitals who are participating with us.
How do you see the industry growing in the future and what are Star Health’s plans for the near future?
It is expected that general insurance companies will cross 10 lakh crores by 2030 and health insurance which used to be 9 per cent of the general insurance sector is now around 36 per cent and is expected to reach 40 per cent. Subsequently, the health insurance sector will cross 4 lakh crores by 2030. Going forward health insurance will be a basic human right and hence I foresee very positive and prosperous growth for the industry.
For Star Health, on the distribution end, we are looking at areas where there is profitable growth and newer strategies, and we are trying to diversify our distribution model. On the product's end, we have given many firsts for diabetes, heart disease, and cancer and in the same way, we are trying to introduce something new which is in the pipeline.
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