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A boost to insurance industry… A sunshine industry 3 year policies would do good GI premium income to cross Rs 100,000 crore... GI flourishes in high growth states Risk must cover the ‘burning cost’ There’s more to it than 49% LIC stays unaffected by competition Operational efficiency will boost profit UII tops in premium growth The pioneer crosses another landmark Promise of quantum growth
 
The pioneer crosses another landmark
“V Jagannathan has created history in developing Star Health Insurance as a stand-alone health insurance company. Many others have followed him,” said T S Vijayan, Chairman, IRDA.

Participating at a function to celebrate the company crossing the land mark of Rs 1000 crore in retail health insurance business, IRDA Chairman Vijayan complimented the company for coming out with yet another innovative product, the ‘Star Diabetes Safe’ insurance policy.

 

1000 crore premium, 14 lakh policies, 41 lakh persons…

Soon after his retirement as the CMD of United India Insurance Company, which he served with distinction for over three decades, Jagannathan set up the stand-alone health insurance company Star Health. Till then, health insurance was a small part of the business of general insurance companies. In just seven years Star Health has built a healthy capital base of Rs 549 crore. Jagannathan pointed to the company issuing close to 14 lakh policies covering over 41 lakh persons. His uncanny knack of networking with hospitals, medical professionals, policy makers and his yen for innovation have helped the company set up 720 offices spread over the country with over 5000 employees.

D R Karthikeyan (former Director, CBI) and a Director of the company, who launched the new policy, referred to the company coming out with custom-made policies meeting the rising needs of the citizens. He pointed to a special feature of the product: “a person living with diabetes for any number of years can take an insurance policy with pre-insurance medical tests made optional. The policy covers all complications of Type I and Type II diabetes along with regular health cover including heart-related ailments.”

 

Quality healthcare to all...

Jagannathan persuaded the governments of Andhra Pradesh and Tamil Nadu to provide comprehensive health cover for their citizens under which the respective governments paid the insurance premium and took care of surgeries and medical treatment of the state’s citizens. This pioneering effort of Jagannathan has made expensive healthcare reach the entire population.

Jagannathan’s forte has been his suave nature, humility and the capacity to reach out. In quick time Star Health has got registered 6000 hospitals across India, instituted systems to evaluate protocols, cost of diagnosis and treatment and in successfully negotiating terms that are fair to all.

The company has earned a reputation for fairness and speed of settlements. Look at his record: Star Health has processed around 250,000 claims up to February 2014 with TAT for cashless authorisation within one hour of 82 per cent, within two hours of 99 per cent and reimbursement within seven days of 89 per cent.”

 

Procedures and diagnoses need to be standardised…

 

Vijayan expressed concern over the difficulty in regulating hospitals: “there is wide variation in charges for the same disease and treatment. 25,000 hospitals are listed with IRDA. We are studying the charging pattern,” he said.     In a healthcare special issue, IE quoted the famous cardiologist Dr S Thanikachalam: “in the developed countries of the west, there is a great degree of congruence of opinions on the treatment for a particular set of diagnoses; this is not so in India. There is a centripetal force: on the same results of diagnosis, treatments differ from one specialist to another! There is lack of transparency and little information provided to the patient…”

 

Why not large hospitals recognise each other?

IE also raised another issue with Dr P C Reddy who pioneered corporate hospitals in the country, the wastages involved in repeating tests while seeking a second opinion. For instance, a patient would have taken various tests involving a few thousand rupees at Fortis Malar. If he seeks a second opinion at Apollo, the hospital prescribes another round of tests costing a few more thousands. Reddy admitted to the need for this, but said that the Central government has been working on a system of accreditation of hospitals, which would take care of this. I wondered why leading hospitals in Chennai like Apollo, Fortis Malar, Sri Ramachandra Hospital, Madras Medical Mission, Dr M V Mohan’s Diabetes Centre, MIOT, Frontier Lifeline, Lister Labs… should agree to recognise each other. With costs of medicare shooting up and the cost of insurance along with it, IRDA can look into these aspects as well in the study being conducted.

 

Closer scrutiny of health insurance products…

 

The IRDA Chairman also pointed to the anomaly of heavy discounts provided on insurance of group policies: “this means those who pay lower premium gets subsidised by individuals who pay a much higher premium. This needs closer scrutiny,” he said.

Karthikeyan referred to the lack of access to quality medicare by millions of the population and to obesity and diabetes emerging as major health issues: “for low income groups, 45 per cent of the family income goes for diabetic care,” he pointed out. He, however, expressed happiness over quality healthcare today made available even at the district level.

 

India on diabetes red spot

Dr V Mohan, the renowned diabetologist, spoke on the need to tackle the incidence of diabetes: “in the incidence of diabetes India will soon overtake China; we are a young population. As people age, the incidence of diabetes will explode. High costs of treatment will make the middle class become a poor class and the poor will go below the poverty line,” he cautioned.

Mohan also expressed concern over the increasing incidence of diabetes in adolescents and children also. Lack of timely diagnosis and treatment will affect eyes, kidneys and feet. Those having kidney problems will find the cost unaffordable: “only four per cent of such patients could afford the cost.” He cautioned that of the 65 million diabetics estimated, a third can develop kidney disease, if not

properly treated. Mohan also pointed to the wide prevalence of diabetes in rural areas and those affected are not even aware of this.

Mohan suggested keeping the cost of insurance for diabetics modest and affordable, as also to incentivise those who control it with exercise and diet: “we should consider making the premium lower annually if the sugar level went down,” he suggested.

Star Health needs to be complimented for the pioneering work done in providing innovative insurance products for healthcare. The presence of large number of doctors, representatives of hospitals and experts from the insurance industry is a welcome augury. One looks forward to more such.

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