Why is insurtech a crucial driver for better overall healthcare access for the masses?
The impact of the coronavirus pandemic has shifted focus to the importance of having a health insurance coverage. As per a recent report by Justdial Consumer insights, there has been more than a 300% spike in demand for health policies post-covid. However, this is unlikely to make a dent in the overall penetration of health insurance in India. More than 60% of the population are still not covered through health insurance and as a result pay out of pocket for medical expenses. Additionally, there are still challenges around healthcare such as lack of accessibility, quality, and awareness. Insurtechs, and those specifically focused on health insurance and healthcare are trying to tackle these problems head-on.
What are the healthcare challenges faced by India?
- Lack of trained medical manpower – According to a report, the density of qualified active health workforce in India is as low as 11 doctors and nurses to 10,000 people in India. This is a stark contrast to the WHO recommended threshold of 44.5 workers per 10,000 people. The shortages are more severe for nurses and as a result the doctor to nurse ratio is highly skewed for India. While manpower cannot be fixed overnight, there has to be increasing use of technology to optimally utilize
- Lack of infrastructure – A developing nation serving over a billion population, creates a Herculean task for the health care sector. As per a 2020 report, India ranked 155th globally in terms of hospital bed availability with only 5 beds per 10,000 people. Vietnam, a comparably high populous country had 32 beds. This lack of infrastructure was brutally exposed during the covid wave.
- Paying out of pocket – While public medical centres offer free healthcare services, they are poorly equipped, which compromises the service quality and suffer from manpower shortage. This has led to a dependency on the private institutions for treatment. These health expenses come out of the pocket in the absence of health insurance or if these are OPD consultations. Around 65% of the medical expenses in India are out of pocket.
How Insurtechs are solving healthcare problems?
- Insurance Claim Support – There are many companies focusing on enabling claim support for health insurance. This has resulted in claims becoming streamlined operationally for insurance companies and hospitals. This has resulted in reduced cost of claims for insurance companies. On the customer side, claim filing is now also digital and paperless with the use of technology. Claim tech companies are also ensuring that proper eligibility checks are run before getting admitted to a hospital resulting in reduced incidence of out-of-pocket expenses.
- Education and Awareness – Insurtechs are focussing on creating high level of awareness for health insurance and healthcare. Complex insurance constructs are simplified so that people are well aware of what benefits they are entitled to. These insurtecs also increase awareness of healthcare issues and also promote a healthier lifestyles through their technology platforms.
- Solving for out-of-pocket expenses – Insurtechs are innovating healthcare products and bundling OPD covers and other services into health subscription plans. As a result, people generally get a holistic healthcare program when they subscribe to these services. Along with increasing insurance penetration, having these additional healthcare services also helps in reducing out of pocket spends for the consumer.
- Telemedicine – Telemedicine has the potential to provide primary healthcare access to even the most remote locations. Some insurtechs have integrated telemedicine services within their platforms. This lets people access quality healthcare professionals even in villages. The cost of telemedicine is also very low compared to traditional in person visits, thereby enabling affordable primary healthcare. Telemedicine can also help solve problems of lack of infrastructure in India, if developed carefully.
The Bottom Line:
Insurtechs are at the forefront of enabling high insurance penetration. A higher health insurance penetration will translate to a better managed healthcare ecosystem for a country like India. As these companies grow, a health care utopia may be possible and provide India with affordable and quality medical services.
Views expressed above are the author’s own.
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