Now, recession gives a bitter pill to healthcare

By M H Ahssan

Firms Redesigning Their Healthcare Policies

If the healthcare sector appeared recession-proof so far, business will now be affected with many firms in IT and finance sectors trimming their medical expenditure budget on employees.

Health insurance providers say many firms are getting their group health insurance policies (given to employees as perks) redesigned, that excludes parents from the health cover and does away with frills such as deluxe room stay while undergoing medical treatment. This would reduce their premium load by 30 to 50 per cent, they say.

Firms have sought redesigning of their group insurance policies over the last couple of months at the time of policy renewal or during the quarterly meetings with insurance providers. Battling a premium that runs into crores of rupees, firms have now sought to set limits for various procedures, particularly the planned ones.

A firm with 800 employees, for instance, has a premium load of Rs 1.8 crore per annum and wishes to bring it down by half next year. So, the once open-ended maternity cover now comes with a limit so do other procedures such as cataract. Some firms are even looking at “copayment” options wherein the employee shares a fraction of the total hospital bill.

But significantly, it is the high risk patients, the elderly, that most companies have decided to wash their hands off. “If you see the claim ratio at the end of the policy period, the claims for parents are the most and the amount is also very high. So parent coverage is now being deleted,” says Dr Venkata Ramanna, manager (operations), Mediassist India Pvt Ltd, a third party administrator. Sharing of hospital expense is mainly being done with employees who have spent less than a year with the organisation.

No company is doing away with the health insurance cover but only tweaking it to reduce the annual premium it pays. “They are cutting down on frills, not ailments. Earlier there was no limit for maternity and a person with a health cover of Rs 3 lakh would opt for a super deluxe suite. Now a sub-limit for maternity has been set,” says C Chandrasekhar, group head (marketing), Apollo Hospitals, explaining that once such sub-limits are imposed the price (of treatment) does come down, and so does the premium.

In many cases a limit of Rs 20,000 has been set for a normal delivery and Rs 25,000 for a caesarean, which hospital administrators say is a good amount.

The limit being set for cataract operations is about Rs 18,000. And other luxuries such as including in-laws and other dependents (which are not immediate family) covered are also done away with.

Given that health insurance cover of employees of hundreds of firms not only improved footfalls in hospitals but also the patronage of high-end rooms, which people paying from their pocket wouldn’t opt for, it could well be a lean year for hospitals.

But administrators disagree. “Patients with a health cover comprise about 15 to 20 per cent of the total number of patients we get. Of this, only 6 to 7 per cent would be availing our deluxe rooms,” says Dr H S R Arora, chief hospital administrator, Care Hospital, reasoning that tweaked health insurance packages wouldn’t make much of dent to healthcare business.