It is the world’s worst kept secret that private Indian hospitals and nursing homes, especially the “brands” which get plenty of press, are ripping people off. They have one ratecard for patients who pay by cash—and another for those who avail of a “cashless” facility vide their health/ medical insurance.
Now, 18 insurance companies, including the four public sector ones, have seen through the game and stopped the cashless facility from July 1. Their contention: they are losing as much as Rs 1,500 crore of the Rs 6,000 crore they collect in premiums from mediclaim policies because of the exaggerated rates.
Like night follows day, the “high-end hospitals” have contested the claim, and have the backing of industry bodies like FICCI. They blame the policy packages of the insurance companies. “How can someone unilaterally claim that our prices are high?” asks Vishal Bali of Fortis, pointing to the costs of setting up world-class facilities.
Obviously, the withdrawal of the cashless facility inconveniences patients, but do our “world-class” facilities deserve to charge 100% or more from health insurance policy holders? Is it OK for hospitals to rip off insurance companies because, well, insurance companies rip off from us? Has medicine become a business, and is that for the good?
Also read: Once upon a time, when my doctor was an angel
Once upon a time, when doctors were like angels
Hmmm… insurance cos v corporate hospitals.
Whom to support? Whom to support? hmmm…#
Nope can’t pick sides. Hope they both burn in hell.
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What do they mean? Why do they collect premium then? They are still at profit of 4500 Crore?
Someone please make me understand this.
Why think the Insurance companies are clean on this. It is business for everyone. People want to find means to maximize (earnings – expenditure), wheter Hospitals or Insurance.
It is the Medical Insurance which has been responsible for Inflated Medical Show-Offs :)
What I have observed and fought against in hospitals is that they have one rate card for insurance and the cash rates are usually massively bloated for which you have to fight tooth and nail. Their defence is that they have to serve ‘poor’ patients and hence they ripoff insurance and gullible cash paying customers. Now the original scamsters i.e health insurance guys are feeling the pinch … hopefully this paves the way for healthcare prices to be more reasonable. Medicine like any other service is and always a business.
It does not just end at Insurance Companies and Private Hospitals, I work for the second largest software company in the world (do I care??) and two years back they introduced a new group claim policy for all of its employees. They changed the vendor to you know who one of the squabbling brothers the wealthiest our country has produced. And since then the premium has been increased. Previously borne by the company now even employees contribute to the premium part of their monthly income. Say 1k per month * 12 months * 1000 employees (in my block i.e.,) = Rs. 1.2 Cr + company contribution. I can’t tell how much 1000 employees would require in cases of emergency but certainly not whole sum. During the same time some team started work on new software development for health sciences industry saying its the next big thing blah blah … This at the height of recession couple of years back. I wonder still if there is a connection between the two and they are ripping off from what I get paid. I inquired with few friends in big mnc’s and they all said such thing did not happen in their company.
Alva Matte:
>Someone please make me understand this.
I understand the US healthcare domain quite well. In US many insurance policies pay all your medical bills, some have something called co-pay.
The rapid escalation in costs of healthcare in US is largely attributed to the same phenomenon – Insured persons not caring what the hospitals charge as they don’t pay for it. And Hospitals and Doctors took full use of this fact and started doing unnecessary tests, diagnostics that would cover their own ass (and purse).
This escalated premiums and today the mess is such that, after housing, medical insurance premiums are the next single biggest expense an US resident may have!!
India was on the same path… I have first hand experience of this where a doctor of Sagar Apollo asked me if we are covered for medical insurance for a procedure with my wife. I asked him why, he said i we are covered we could go for a titanium alloy Joint replacement, which is the best but expensive solution, if not they’d do a simple surgery to fix the joint.
I told him to his face – If a procedure has to be done, and it is in the best interest of me, It’ll have to be done – not because I have an Insurance!!!
Loosing faith in that doctor, we went to a famous old-time ortho, who adviced us that she doesn’t even need a surgery!!! Today she is completely healed, without any procedure what so ever!
Corporate hospitals have indeed become a racket. They’ll ruin our healthcare segment if these tendency is not plugged at the earliest. I welcome this move from our Insurance companies, though I benefited once by their cashless facility in Wockhardt when my father went through the surgery.
In fact, I believe the same thing is happening in the Vehicle insurance domain. My vehicle had a small damage due to someone bumping the rear of the car. Needed dent removal and Painting. The service center manager asked me if I’d like to claim insurance or not. I asked him how does it matter to him – then he laughingly told me if it is through insurance then the work will cost around 12K, without Insurance they’d do it for about 8K!! I was enraged!
I came out of there, got the same thing done at a local shop near Indiranagar for just 4K – 1/3rd the price quoted by the Toyota Showroom, with insurance!!!
The bottom line, this ends up screwing up our insurance system. Insurance is meant to be a loss reparation. Scams jack up the premiums, then everyone looses.
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Alok:
>Whom to support? Whom to support? hmmm…#
You may find it hard to believe, but Insurance companies are indeed loosing money in 3rd party vehicle insurance (maximum amount of fraud) and in Medical Insurance (ripoffs by hospitals).
They make profits in Life insurance, in other general insurance. But, loose quite heavily in Medical and vehicles.
This is bound to increase the premiums – which is bad news for honest insurance buyers.
We should support blacklisting of any hospital/service centers who rip off insurance companies. It is in our interest.
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Karihaida:
>their defence is that they have to serve ‘poor’ patients and hence they ripoff insurance and gullible cash paying customers.
We all know this is bullshit argument.
The right strategy for serving ‘poor’ patients is to get charity backing, and also by charging non-poor patients a slightly higher margins uniformally.
Dr. Devi shetty’s philosophy is very good in this – They charge higher amount for out-patients and subsidize in patients. His logic – an outpatient bill is never more than Rs.1000 and most people easily afford this. An in-patient typically needs a procedure costing 10s of thousand rupees, so they keep razor thin margin on such operations, and even subsidize poor patients. Like that model better than ‘ripoff Insurance co.” scheme.
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>but do our “world-class” facilities deserve to charge 100% or more from health insurance policy holders?
Part of the problem is also that there is ‘one size fits all’ approach of Insurance companies. They should come up with premium insurance products, that cover hospitalization in ‘ripoff hospitals’…. ;-)
Our parents made do with hospitals that didn’t have central AC, and plush five star environs. If we want such a facility, we should pay high premiums, not every insurance buyer.
Whether insurance companies or plus corporate hospitals, it is human greed which makes aam admi like me suffer.
harkol
A valid point, but I think the insurance companies are also not entirely innocent here.
Insurance works on the premise that risk (accident, health, theft, etc.) is better borne by spreading small amounts of it across many, many people who all pay a small amount (premium) to prevent suffering a large loss due to the risk. So you’d rather pay say, a hundred rupees a year to avoid paying a lakh for that one in 100 chance that you get a heart attack and need surgery (gross oversimplification but you get the idea).
What we are seeing here is a classic case of moral hazard. With cashless payment facilities, the patient is not likely to go away because of the high fees since he is getting the benefit (treatment) without facing the consequences (higher rates). Whereas higher cash rates removes this moral hazard (if it is too high, I will just go to the next hospital which has an incentive to lower prices and attract my business), with cashless payments, the only ones who feel robbed are the insurance cos. who foot the bill.
If insurance cos. passed on the increased costs to the consumer through increased premia (and explained why they were doing so), consumers will be forced to adjust either by choosing a plan that has limits on coverage (and thereby reducing incentive to force needless treatments on patients) or just sticking with cash payments since the advantage of insurance is being lost.
However, insurance cos. want to have it both ways. They don’t want to lose customers (by increasing premia) and they want to squeeze the corporate hospitals as well.
I expect of course that the issue will be sorted out between insurers and hospitals, and consumers and patients will have little say in the matter anyway. Whichever party “wins” will not necessarily pass on the benefit to the consumer or patient, so permit me my unhealthy/healthy cynicism/skepticism (cross out as required)
S V CAN:
>I can’t tell how much 1000 employees would require in cases of emergency but certainly not whole sum.
You are so wrong. To coonsume 1.25 crores, all it needs is some 30-40 hospitalizations for heart diseases involving surgery. Average heart operation will cost between 1.5 to 2lakhs.
Cancer will cost more – Upto 7-8 lakhs for Chemo therapy.
In Group insurance the whole family i covered. It isn’t unthinkable that out of 1000 employees there are atleast 100 (10%) who are senior management having old parents needing serious hospitalization…
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Alok:
>However, insurance cos. want to have it both ways. They don’t want to lose customers (by increasing premia) and they want to squeeze the corporate hospitals as well.
Exactly what I said – Insurance companies have One size fits all approach. They should change it…
I think people are missing the point here.
The medical insurance companies have stopped the “cashless facility” from July 1. I guess you can still get a procedure done in a hospital and get it reimbursed.
>I guess you can still get a procedure done in a hospital and get it reimbursed.
The difference is – I have never got more than 50-60% of the expenditure when I did the claim myself. They always find some fault with the documentation and decline.. It is impossible for you to run after doctors/hopital trying to arrange all the documentation needed. So, you give up…
In cashless, hospital is directly dealing with the TPA, so their paperwork will be pucca… But, when they give documents to patients they won’t give all documentation needed by insurance..
it is a no-win situation. But, I’d rather have the lesser of the evils. i.e. lesser insurance coverage than Hospitals ripping off insurance companies and increasing overall cost of healthcare.
I recently got operated on my knee (had got injured while playing football). The bill amounted to over 1 lakh. I got reimbursed for full amount except for a 2-3 thousand rupees.
If hospitals don’t give pucca documentation, people won’t go to such hospitals. And hospitals will give pucca documentaion for genuine cases. So, genuine people should have no fear over this step. But, only hitch is you will need to have money beforehand, thats all.
Complex:
>And hospitals will give pucca documentaion for genuine cases.
This isn’t true in all cases. Majority of the Hospitals are still coming to terms with how insurance works.
But, most corporate hospitals have figured this out. 1Lakh for a knee operation?? I am sure it was a corporate hospital.. ;-)
This is where capitalism fails.
Greed among doctors! No, it’s infact inflicted upon them, how long they can sustain themselves in a expensive city like Bengloor! Sometimes I wonder how rapidly a city can become expensive and everyone tense because of brutal greed. Everyone is in the competition, none wants to earn!
The family corporate cashless hospitalization card is a racket. It doesn’t include parents, while the probability of young generation getting hospitalized is less.
And I hear the LIC money is going on mutual funds or raising usury/Baddi to the tune of 1000’s of crores!!
A few money mongers as the head and see how a whole society runs behind money forgetting social values.
In UK there is nothing called private hospital.
That shows how badly we have copied the social system still speaking their language.
You bet hospitals rip off insurance companies…and insurance companies are ripping off customers because of their inability to work with the hospitals and create a win-win. My insurance company, Reliance, has increased my premium by a multiple of over five, yes over five times recently. I suspect this is because of the recent situation between hospitals and insurance companies, and my policy has now come up for renewal. Note that I have not made a single claim in the three years I have been insured with this company – just paid my premium regularly! The customer is paying for the inefficiency and greed in the system. All parties should work towards a just system that will not only keep things reasonable, but will also enlarge the overall insurance market (it is tiny compared to the potential) for everyones benefit. Come On, think for everyone’s benefit andthis can be sorted out!!
@harkol:
1Lakh for a knee operation?? I am sure it was a corporate hospital.. ;-)
No, it wasn’t.
Complex:
Must’ve been something serious. Hope you are doing well now.
Mohan:
>The customer is paying for the inefficiency and greed in the system.
This is precisely why I support this ‘wake up’ call from Insurance companies. High time govt. regulated healthcare to make sure we don’t go the way USA went.
Check any person in US how screwed up US healthcare system is, and why we so don’t want to get there.
The way to make medicare cheaper is to produce Doctors in the same numbers as engineers. Our society needs more doctors than engineers, as we have so many people.
Admittedly, medical education is more expensive than Engineering. This is where govt. should step in and establish (Or help establish) many colleges that provide education at reasonable cost to students who are willing to work for 5-7 years in public/low-cost/non-profit facilities.
If Cuba could manage the cheapest and one of the best public health care in the world, no reason why India can’t.
@harkol:
Recovery going on ok. Fingers crossed