The Hindu Business Line : Regulate hospital charges, urge health insurers

HEALTH insurers are seeking grading of private hospitals and regulation of their charges. According to them, private hospitals charge higher rates from patients treated under health insurance schemes. This results in insurers paying huge claims, rendering mediclaim schemes a losing proposition for them.

Following requests from public sector insurance companies, the Insurance Regulatory Development Authority (IRDA) has set up an expert committee to suggest a system to regulate hospital charges.

PSU insurers are understood to have suggested either a single national health regulatory authority or State-level authorities. The committee is expected to make its recommendation, said an official with a PSU general insurance company.

The committee is collecting details of hospital charges from third-party administrators (TPA) of health insurance schemes. According to an official associated with the committee's work, it has been reported that some hospitals charge four-five times the normal rates.

The committee is expected to suggest grading of hospitals based on their facilities and the number of specialists they have, said the official. At present, doctors and their fees are not regulated by any authority. This should also come under scope of supervision of the regulatory authority.

PSU general insurance companies have been complaining about the hike in the rates of medical treatment under health insurance schemes. The mediclaim portfolio accounts for 8-10 per cent of the PSU insurers' total business.

The private players have also supported the move. Mr Kamesh Goyal, CEO, Bajaj Allianz General Insurance, said, "This is good move for the hospitals, the customers and insurance companies. Any initiative to standardise health services is good."

One of the reasons private players have been wary of entering the standalone mediclaim product segment is the lack of standard rates, said another official at a private insurance company.

Mr R. Krishnamurthy, MD, Distribution Consulting, Watson Wyatt Insurance Consulting Pvt Ltd, said, "This progressive step (regulation of hospital services) will achieve two objectives. It will bring legitimate pricing into place, much to the convenience of the patient ."

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