Aditya Birla Health Insurance chief executive officer Mayank Bathwal, who joined the Aditya Birla Group in 1994, was instrumental in setting up the health insurance arm in August 2015. In conversation with Mint, Bathwal talks about how standardization of exclusions will impact business growth, whether the new regulations leave gaps for fraud and the need for integration to expedite the claims process. Edited excerpts
What’s your view on the standardization of health insurance exclusions? Are insurers ready for the change?
One of the major challenges in the Indian health insurance industry is that products have had too many exclusions.
Our partner MMI Holdings Ltd comes from South Africa and when I looked at that market, I realized they’re at the extreme end of the spectrum where there are virtually no exclusions and wellness benefits are great. For the Indian market, maybe it was okay to start with a price that was affordable given lack of awareness, but now that the market is evolving, it’s critical to keep removing exclusions.
When we entered the business, we wanted to lower the number of exclusions but when only one company does it, the pricing goes haywire. Even when we said no waiting period and inclusion of OPD expenses for four chronic conditions—asthma, blood pressure, cholesterol and diabetes—in our flagship product, the premiums went high. By reducing or omitting exclusions, you remove a big barrier from the policyholder’s mind and the doubt whether a condition will be covered or not.
Will rise in premiums due to standardization of exclusions impact your business growth?
Sometimes people ask me if health insurance is affordable and my argument is: who defines affordability? It’s all about the value that we create in the consumer’s mind. For the lower income group, Ayushman Bharat Yojana will solve the problem. We’ve been selling products for three years and I don’t think pricing is the first question in a consumer’s mind. They are more worried about the value they get and whether their claim will be settled. No consumer will want to save, say ₹3,000, if it means giving up on critical benefits. So it’s about the way you present the offering.
Regulations say that if a policyholder’s decision-making ability is severely impaired by usage of drugs prescribed by a medical practitioner, the person will still be covered. Can this lead to fraud?
Whenever we implement these changes, there will be a period of finding out what’s the right way. There could be exploitation from the policyholder as well as the hospital. But we’ll have to find ways and, in the process, there will be some cases where a genuine policyholder gets impacted if the insurer gets the result wrong or the insurer may get impacted if the policyholder is doing the wrong thing. But even today, in regular claims, 10-12% claims are fraud. We’ll have to deal with it but the good thing is, with data and analytics, the ability of insurers to identify fraud has become better. But definitely, there will be a period of learning.
More and more people having cashless policies are complaining about long delays in discharge from the hospital. Why is this happening and what’s the solution?
Some part of the delay like the process of making the discharge summary is regular and happens even if you take the reimbursement route. What takes longer is the exchange of information between the insurer and the hospital.
The best way to deal with this is to have a common portal where the concerned hospital’s TPA upload the data and the insurance company’s personnel looks at the data and takes a call. This will make the whole process seamless and that’s how it happens in some of the mature markets. We’ve been trying to get the hospitals’ systems to talk to our systems directly so that patients’ data directly gets transferred to our systems. But this has not been very efficient because we have a network of 6,000-plus hospitals and integrating with all of them is a mammoth task. Similarly, for each hospital to integrate with so many insurers is a hard task. There is a need for a single portal with which all hospitals and insurers can integrate. This somehow has not happened so far in India, but Irdai is talking about it. Most part of the process is manual right now which takes a long time, so there is an urgent need for integration.
What are some of the biggest challenges in health insurance today? How are you dealing with them?
One challenge is awareness which is an industry phenomenon and I think a single company can’t do much about this. The need of the hour is to have a campaign similar to what mutual funds have. But I am positive about awareness picking up, thanks to Ayushman Bharat. It will rub off on everybody because when they see people in the lower-income category have health insurance, they’ll understand the need as well.
The second challenge is consumers not seeing value because of the long list of exclusions but I am hoping the new regulations will solve this to some extent. Then there’s also a need to make the claims experience smoother. Right now there’s too much paperwork. At a company-level, we are trying to make the cashless process more virtual by hand-holding the policyholder from pre-authorization to discharge.
The third challenge is fraud, waste and abuse. And to my mind, this impacts two things. One, if there are 10-12% alleged cases of fraud, (then to compensate for it) the pricing is impacted. And second is the claims experience. There could be cases of alleged fraud which may not turn out to be so after investigation. But investigation is time consuming.