Despite its immense potential in India, health insurance is in an anaemic state.

India is already boldly taking its place as one of the leading healthcare markets in the world, forecasted to be one of the top 10 pharmaceutical markets by 2017, with a projected market size of $25 billion, and a CAGR between 11-13 per cent for the period 2012-17.

A sustainable health insurance system is absolutely critical.

Fortunately, this process is underway. As of 2010, over 300 million people (25 per cent of the population) had some form of health insurance – an astonishing 445 per cent increase from 2004.

Even more astonishing are World Bank estimates that by 2015, 50 per cent of the population (or approximately 630 million people) will be able to access a health insurance programme.

But India’s nascent and fragmented insurance market is facing serious issues that require thoughtful solutions.

NEED FOR CHANGE

Priority 1: Responding to competition with innovation: The arrival of new entrants, coupled with an increasingly aware consumer population has placed a burden on companies to manage – and differentiate – their portfolio.

The growth of India’s health insurance industry has brought forth some compelling business models and significant opportunities.

But, as patients across India will attest, though there is a myriad of options in insurers, there is almost no variation across offerings.

Success will require a proactive approach to capturing new customers.

Priority 2: Building an appropriate pricing structure: Across all levels of the population, people are beginning to understand that insurance is a necessary step to ensuring the affordability of better standards of care. This has resulted in a relatively high “willingness to pay”. The onus, then, is on health insurance companies to build relevant, appropriate pricing models.

Priority 3: Stabilising and legitimising the claims process: Health insurance companies today (across all segments) are burdened with inconsistent relationships with unregulated stakeholders — from providers to patients.

The Secretary-General of the General Insurance Council estimates that 15 per cent of insurance claims processed in India are fraudulent (patient fraud, inflated medical bills, underwriting lapses, process gaps, and so on). Even more shocking is the estimate that around Rs 800 crore is lost on inaccurate or falsified claims – every year.

MOVING FORWARD

Both, existing and new players need to acknowledge that there is huge gap between the objective of universal health insurance in India and the current state.

Without doubt, the industry needs a careful balance of stabilisation and innovation across the board as well as a continued focus on managing public perception. Efforts are also needed to consolidate data across stakeholders and transform it into accurate, actionable information and customer-focused products.

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