Narayana Health Insurance: Revolutionary Model for India’s Healthcare?
- A new health insurance and healthcare model, named the managed or integrated healthcare scheme, has been introduced by Narayana Health Insurance in India. This model aims to eliminate issues in the traditional health insurance model by focusing on proactive diagnosis and treatment.
- The traditional model often sees healthcare providers and insurers at odds, with the former incentivized to maximize billing and the latter to minimize payment. These conflicts often occur at the expense of the patient. On the other hand, the managed care model merges the roles of the provider and payer into one entity, thus eliminating the conflict. Also, it motivates the healthcare provider to proactively screen and treat diseases early to avoid costly treatments later.
- However, the managed healthcare model also comes with risks including the potential withholding of appropriate treatment to save costs, selective insurance sale to only healthy individuals, and incorrectly set premiums that could make the operation unviable. These risks can be addressed through regulations, competition, reputational damage, and actuarial expertise.
Narayana Health Insurance Introduces Integrated Healthcare in India
Combining health insurance and healthcare, Narayana Health Insurance in India has revealed an integrated healthcare model striving to eliminate traditional health insurance pitfalls, and prioritize timely diagnosis and treatment.
Challenges with Traditional Health Insurance Model
In conventional health insurance, healthcare providers and insurers often conflict, negatively affecting the consumer. Providers wish to maximize billing, insurers aim to restrict payments. Increased healthcare costs are a notable outcome when patients have insurance, due to a stack-up of investigations, consultations, procedures, and treatment protocols. Standardization of treatment protocols by insurers, regardless of treatment facility, also detracts from the patient’s quality of care.
Traditional health insurance schemes often disregard prevention, focusing more on curative treatment. Despite occasional efforts by insurers to encourage insured individuals to undergo preventive check-ups, such initiatives rarely succeed in India.
Advantages of Managed Care Model
The managed care model, however, takes a different approach. Here, the healthcare provider also offers insurance, effectively eliminating the conflict of interest present in traditional models. The provider is incentivized to actively screen its insured population, enabling early detection and treatment of diseases, hence avoiding later costly procedures.
Managed care systems entrust the health of a certain population to a care provider, paid upfront. The premium collected serves to maintain patient health and cover treatment costs when necessary. Despite its potential, this model has yet to gain widespread adoption in India.
Risks and Regulations
Whilst promising, managed healthcare models come with three primary risks. First, the provider may withhold necessary treatment to keep costs low. This can be managed through regulation, competition, and the threat of reputational damage. Second, insurance may only be sold to young, healthy individuals – regulation should prevent this. Lastly, the risk lies in underestimating the premium, potentially rendering the operation financially unviable, and necessitating top-tier actuarial expertise to set insurance prices.
Narayana has obtained the green light from the insurance regulator under its regulatory sandbox scheme, designed to test innovative approaches. For managed care to succeed, constraints on tying insurance to specific care providers must be removed. This transformative model holds the potential to deliver better health outcomes and reduce care costs.
Visit Narayana Health Insurance for more information
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