The right approach to Mediclaim

The views expressed by Mr Fali Poncha in this column are his personal views and not those of the company he serves

A Mediclaim policy is the most valuable investment an individual or a family can make, as it protects one’s savings/capital, which would otherwise get eroded by major medical expenses incurred through hospitalisation. It is, therefore, unquestionably incorrect to suggest that anyone is better off without taking a Mediclaim cover.
There is no doubt that all claims rejected would stand scrutiny.
There is also no doubt that the functioning of third party administrators (TPAs) generally leaves much to be desired. They have been granted total authority without the obligation to be accountable for their decisions and insurers plead helplessness when approached by an insured whose claim has been rejected or reduced unjustifiably.
The very functioning of TPAs has several deficiencies. When denying cashless authorisation, they do not distinguish between planned hospitalisation and emergency hospitalisation as in both situations they demand to be advised of final diagnosis and final line of treatment.
In most cases, the TPA’s infrastructure does lag way behind the volume of work, resulting in uncalled-for delays.
That the TPA system suffers from several deficiencies is known to the insurers, the General Insurance Council (GIC) and the Insurance Regulatory and Development Authority (IRDA). Several months back, the IRDA nominated a high level committee to submit its findings on the TPA system.  However, to date, the general insuring public has no information as to the findings of this committee.
Almost from the beginning, insurers have applied little underwriting to this class of business. In the mindless competition for corporate business, they have willingly written group Mediclaim for corporates at loss ratios ranging from 200% to 400%, whereas the loss ratio for individual buyers of Mediclaim was consistently at sustainable levels.
Interesting insights would emerge if statistics were to be published relating to the following:
• The average rate of premium charged for individual covers and group covers i.e., the total premium as a percentage of total sums insured.

• The percentage of rejected claims to total claims submitted under individual/family policies and corporate group policies.
On the value of diagnostic tests, pre-granting of cover in order to determine pre-existing ailments would entail additional costs, but the result could be easily manipulated through resorting to medication pre-tests—like beta-blockers by hypertensive patients and sugar-level reduction medication by diabetics. A better and cost-effective solution would be to obtain medical history details from the family doctor along with the proposal form.
There are other failures which are difficult to guard against. The primary one being higher medical and surgical costs being charged by doctors to patients having Mediclaim cover and unnecessary tests being repeated by hospitals in order to inflate the per-bed/per-day recovery.
Having said that, there is no denying the fact that for insurers as a whole, total claims in a year exceed total premium recovered by 40%. This runs counter to the very principle of insurance which is to recover from many to pay a few, to provide an essential service at a fair cost.
I am of the firm opinion that if Mediclaim covers are underwritten on sound and fair lines and claims settled fairly and expeditiously, the industry could manage this class of business at breakeven or possibly a small margin of profit. With the considerable expertise within the insurance industry and the authorities overseeing the industry, I am confident that this can be achieved provided there is a combined will to tackle the problems firmly but fairly.
Any advice to the effect that it would be better to go self-insured would be akin to throwing the baby out with the bathwater. All that needs to be done is to ensure that the quality of the bathwater is good for the baby’s health. 
(The author is chairman of International Reinsurance and Insurance Consultancy Services Pvt Ltd, an insurance brokerage firm)

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    samant kaka

    1 decade ago

    good cooments. i will send m views


    1 decade ago

    Any company making a loss of 40% would have closed shop. Obviously the men running such insurance companies, the hospitals and the TPAs have been making a lot of money.
    The author of this article too could have a vested interest. It is the common man who has always been the loser. Just stay away from these modern day thugs.

    Ajay Ahuja

    1 decade ago

    Dear Ms. Fali,
    Pls accept my compliments on the great write-up.
    Our Govt.'s make all sorts of Rules & Regulations for the Insurers, Advisors, etc. Unfortunately, there do not seem to be any set of rules governing the TPA's.
    Subscribers to the Mediclaim insurance policies pay an extra charge (built-in into the policy premium) for involving the TPA, but most Hospitals refuse the Cashless facilities or the TPA's delay the confirmation clearances in time, resulting in the subscriber having to pay in cash for getting the Discharge from the Hospitals. Shouldn't the TPA's be billed for the inconvenience they cause to the Subscribers to these Mediclaim policies?
    Something needs to be done on this front.
    Ajay Ahuja
    m- 99209 25589


    1 decade ago

    MEDICLAIM is languishing because of corruption in IRDA. Mediclaim covers only healthy people while those above 70 are not covered when it is most required.The trick is to make people save when they are young and healthy and cover all medical issues till their death.

    Sony India to invest Rs1,800 crore in promotions over the next year

    The electronics giant intends to double the sales of its flat-panel display televisions in the current year. Sony is going to double its investment in promotions to Rs1,470 crore

    Consumer electronics major Sony India on Tuesday said that it would invest up to Rs1,800 crore in the next one year on marketing and promotional activities to create awareness about its products in the country, reports PTI.

    "We intend to double the sales of flat-panel display televisions in India in the current year, and to achieve that we are also going to double the investment in promotions to Rs1,470 crore," Sony India managing director Masaru Tamagawa told reporters.

    He said that the company has invested over Rs700 crore in promoting its 'Bravia' range of  flat-panel display TVs, which contribute more than one-third of its total turnover of Rs3,500 crore in India.

    Besides, the company is also increasing its investment of Rs200 crore on promotions of other products in the country by 25% in the current year, Mr Tamagawa said.

    "We are targeting a 30% market share in the current year in the segment. The total market for LCDs in the country is around 1.6 million units which is expected to grow up to 2.7 million units by the end of the current financial year," Mr Tamagawa said.

    The company also announced that it is going to double its dealer network to 5,000 from 2,500.

    Sony today announced the launch of 24 new models in NX, EXm and BX series under the Bravia umbrella of varying screen sizes between 22 and 60 inches.

    The company said that its new range of TVs are also compatible with the Internet and Sony has exclusive tie-ups with some content providers such as YouTube to provide videos and clips for its Bravia range of TVs.

    "Going forward, we are also going to launch 3D TVs in India for which the announcement would be made in the month of June 2010," Mr Tamagawa said.

    He said that Sony is also the official sponsor of the FIFA World Cup 2010 and will broadcast some of the matches in the 3D format in India.

    Separately, Sony India's parent, Japanese Sony Corp said that it will launch 3D televisions in June and expects the 3D TV to form about 10% of the total LCD market across the world, media reports said.

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    dhiraj kulkarni

    10 years ago

    I have a decent promotional offer for sony cyber shot. I am publishing a photo book of my 1500 km trekking tour in the himalayas. book contains 1000 + photos in the garwal himalayas shot by sony cyber shot. it would be a big hit if can get the support of sony in publishing the work

    Google, Dish Network test TV search service

    Google is testing a new TV programming search service with Dish Network, a move that would allow users to find content from the television and the Web

    Internet search engine giant Google is testing a new TV-programming search service with satellite television operator Dish Network Corp, a move that would allow users to find content from television and the Web, reports PTI.

    Attributing the developments to people familiar with the matter, The Wall Street Journal reported that Google is testing a new TV programming search service with Dish Network Corp.

    The report said that the service, which runs on TV set-top boxes containing Google software, allows users to find shows on the satellite TV service as well as video from websites like Google's YouTube.

    It will also allow users to personalise the line-up of shows.

    With this, Google moves deeper into a crowded field of companies, large and small, that have been trying for years to marry the Web and TV and their business models—from rivals Microsoft Corp and Apple Inc to the makers of TVs and set-top boxes.

    According to the publication, both companies declined to comment on the plan.

    In addition to the test with Dish, Google has been talking to a range of other television service providers and hardware makers, prodding them to use its Android-based technologies to offer a broader range of programming, a more personal experience and varied advertising models, it added.


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