Varun had been suffering from acute pain in his big toe for a few days as the toenail has grown inwards. After some procrastination, he limped to a corporate hospital close by.

This is what followed: An immediate in-patient admission, a flurry of diagnostic tests, a three-day stay in a ‘deluxe’ room, a few injections and a bill for Rs 27,000. A few days after discharge, the pain recurred and he went back for a review. To his dismay, he was put through the same routine once again — this time with a heavier bill of Rs 32,000.

While Venkat was celebrating Diwali with his family, a cracker suddenly exploded in his left hand. He rushed to the casualty wing of a corporate hospital, where he was given the first aid and admitted as an in-patient. His wound was stitched up in the mini operation theatre. The patient then spent the next four days in hospital, gulping antibiotics. When every time he would ask them to send him home, he would be told that he was kept under observation and hence had to stay. The bill for all the VIP attention – Rs 34,000.

Though the two cases are distinctly different from each other, there is one common thread binding them (and hundreds more such) cases. In each of the above case, the hospital has asked and the patient has confirmed that he/she is covered under a health insurance policy. No prizes for guessing how it would have been, had he/she not been covered.

The malaise that afflicts the health insurance sector is well known. Health insurance premium rates are rising steadily – but the claim ratios (the ratio of ‘claims paid’ to ‘net premium received’) and underwriting losses have kept pace too. Insurers have tried to bring in some controls, and TPAs (Third Party Administrators) have been introduced to provide specialist attention to this issue.

But hard as they might try, they just can’t seem to get ahead of the collective greed of the healthcare system in the country. The IRDA can flex its muscles with insurance companies, insurance brokers and TPAs — (all 3 licensed and controlled by IRDA) and strive to protect the interest of the insured.

However, hospitals, the most important link in the chain, are not regulated by any statutory authority. And all of us are probably paying the price. Hospital treatment costs have gone up quite steeply in the past few years. For example, a Caesarean Section will cost you Rs 40,000 to 45,000 (in a 100-bed hospital) vis-À-vis Rs 20,000 to 25,000 3 years ago.

Hospital charges are going up by 15 per cent every year. As a result of higher claims ratios, rack rates for individual health insurance (benchmarked to the PSU insurers) have gone up by about 80 per cent between 2001 and December 2007

How long will this go on? Understandably, the insured can do little to improve his/her plight.

They neither have the bargaining power nor the relevant information to fight. The same, however, is not true for other players such as the regulator, the insurers and corporates — who collectively have the required strength and determination to fight. What can they do to discipline errant healthcare providers? What ammunition do they need to fight this problem?

For starters, the Government (regulator) can help finalise the white paper on standard rates for treatment of various ailments (this has been in the making for several years now) and circulate it widely (The Ministry of Health & Family Welfare has recently taken an important step in this direction by conducting and publishing a study on Standard Treatment Guidelines and their Costing in Collaboration with WHO and AFMC, Pune). If wielding the stick is not possible, then perhaps the carrot might work – why not extend tax (or import duty) concessions to hospitals compliant with best practices?

Insurers, on their part, can advise TPAs to report all unusual cases of excess billing — compile statistics hospital-wise and identify habitual offenders. These hospitals can be blacklisted or ‘grey-listed’ — the cashless facility can be withdrawn and insured can be “advised” to stay away from such hospitals (one cannot stop them) — as a disincentive, patronage could simply attract a Co-pay (where the patient shares a part of the claim amount even if within approved limits). Corporates can do likewise with their employees. They could also consider categorising hospitals internally and reward the ‘good’ ones with an accelerated payment cycle.

What we need is the collective Will power to give this effort a big push. Let’s address this before Indian healthcare insurance becomes more expensive than the cheapest car in the world.

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