VISHWAS 2017 Insurance / TPA – Empanelment and Affiliation –Strengthening the Payer & Provider relationship February, 2017

Usual Health Insurance Policies for which hospitals deal with health insurance companies / TPAs Group Health Insurance Policies Individual Health Insurance Policies Government Health Insurance Policies Source: IRDA Annual Report 2014-15

How it all started In 2003, IRDA formulated the TPA (Third Party Administrator) regulations TPAs started operating as administrative arms of health insurance companies – government insurance companies – United, New India, Oriental, National – being the key ones TPAs tied up with hospitals all over the country for providing care to their card holders without charging upfront cash Therefore, it was creation of primarily a financial credit network and less a care network Today, pre-packaged pricing has been added to the agreements, but the basic nature of the relationship has remained same

How this will and has to change INDIA SAUDI ARABIA UAE ~ 1.3 billion ~ 32 million ~ 9.2 million Population ~ USD 105 billion ~ USD 80 billion ~ USD 25 billion Healthcare Spend ~ USD 3 billion ~ USD 5 billion ~ USD 7.5 billion Health Insurance Premium Health Premium to Health Spend ~ 2.9% ~ 6.25% ~ 30% Therefore, health insurance premium will only go up in India Approximate numbers for 2015

How this will and has to change Now let’s look at the India numbers in a bit more detail: Healthcare Spend Health Insurance Premium In-patient Spend ~ USD 105 billion ~ USD 21 billion ~ USD 3 billion Out-patient Spend ~ USD 84 billion 14.3% of In-patient spend is insured In large metros and cities it ranges from 30%-40%, and for some specialty care facilities it can be as high as nearly 50% Approximate numbers for 2015

How this will and has to change Why health insurance will go up further: RSBY coverage is going up from 30,000 per family to 1,00,000 and 1,30,000 Government schemes are being expanded to include APL families also There are already 6 stand-alone health insurance companies, and 2-3 more are on their way Consumers are seeking more health insurance as healthcare cost is going up rapidly Health insurance companies are exploring to expand their coverage to cover out-patient expenses

How this will and has to change So the relationship between hospitals and health insurers has to change: Currently the relationship is adversarial The relationship has to change to collaborative

How this will and has to change Possible areas of collaboration: Today the admission, care approval, and discharge processes are as cumbersome and un- friendly as it can be How the processes can become seamless and customer friendly Process Today there is lot of questioning by health insurance companies regarding care process and cost Can hospitals and health insurance companies jointly develop care and cost protocols Can hospitals look at possible ways of risk sharing for care outcomes with insurers Care Today hospitals are only servicing whatever coverage the health insurance companies are providing Can hospitals work jointly with health insurance companies to develop appropriate and targeted coverage for the healthcare customers Product

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