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How to pay your bill when you fall ill

Posted Nov 18 2008 12:13am

No one wants to fall ill , but when you do, the last thing you want to worry about is the doctor’s bills. This is why it’s a good idea to take a health insurance policy to protect yourself against the financial losses caused by a medical problem. Medical care can be expensive and a health insurance policy can provide financial protection and ensure you can afford the best medical care.

The traditional form of health insurance is called indemnity insurance (also known as fee-for-service ) , in which the insurer pays for the cost of covered health care services after they have been provided. In most indemnity insurance plans the patient is free to choose his own doctor or hospital.

In the past, the health insurance business was a monopoly, so the only medical insurance policy available for most of us was MediClaim, through the subsidiaries of the General Insurance Corporation (GIC). Today, with increasing liberalization, the insurance business in India has been opened to the private sector, and there are now many more options to choose from. While this extra choice is great, because companies are competing with one another to offer customers the best deal, having so many options can be confusing ! Also, not all the changes are for the best , and you need to use your judgment when deciding which policy to select for your family. Since the cost of medical treatment is rising faster than the rate of inflation, premiums are likely to increase sharply each year. Also, as you get older, the likelihood of your making a claim increases, which means premiums may jump even more dramatically.

What do customers want from a health insurance policy ? Your basic needs are: protection from financial loss because of hospital bills ; free access to doctors and hospitals you want to go to; no fine print for exclusions; reasonable costs; convenience at the time of hospitalization so you don’t have to pay first and then claim the money from the company ( what is called a “ cashless” transaction);prompt payment of medical claims; quick processing of claims; minimal paperwork; and friendly customer service.

Today, because there are so many companies competing for your business, they all have great marketing campaigns and are happy to sign you up because they want to increase their market share and they know that once signed up, most customers usually stay for life. However, most Indian health insurance companies are still stuck in the past when their only role was limited to paying the hospital bills. All they seem to do collect your premium every year and pay your medical bills in case you fall sick and need hospitalization.

This is shortsighted. Remember that this is a health insurance policy , which should not just provide illness care , but also help us to remain well ! In the USA, which has the most evolved health insurance market, things are different. Insurance companies have realized that spending on medical care after a person falls ill is expensive for them . It’s much more cost-effective to invest money in educating, counseling and motivating people to remain well, so they do not fall ill in the first place - after all, prevention is better than cure ! In fact, in ancient India, this was a well-accepted principle and the doctor ( whose job was to keep the family in good health) was paid only as long as everyone was healthy. If anyone fell ill, the payments stopped, until they recovered. It would be interesting to see if an innovative health insurance company could come up with a modern version of this model !

There are many options now available to insurance companies which they can use to help their customers remain healthy. These include tools for counseling; lifestyle improvement; weight loss; and smoking cessation programs. Many of these can be provided online on the web, which makes them inexpensive to deliver. They can also offer discounted memberships to gyms , spas, yoga classes, meditation retreats and counseling sessions, to help their customers take a proactive approach in managing stress and fighting off disease.

Similar tools can be used to help patients with a chronic illness manage their disease better so they don’t need hospitalization. Hospital care becomes very expensive – and teaching patients to take care of themselves is a powerful therapeutic intervention. This is called “disease management” – and has been applied abroad for a wide range of diseases, ranging from asthma to hypertension to diabetes.

These programs are cost-effective for the insurance company to offer – and don’t need them to spend too much either . An excellent example is the recent study from Partners Health Initiative (PHI) in Anderson, South Carolina which showed they saved an estimated $34.5 million in 30 months—thanks to simply gifting a copy of the world’s largest selling patient education book, the Healthwise Handbook, to all their customers !

The lesson is clear - not only is there a business case for health insurance companies to be investing in patient education , it’s also a great way of helping them win more customers and keeping their customers happy. Enlightened customers should ask health insurance companies for tools to promote their health !

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