Health Insurance in India—A Study of Provider’s Perceptions in Delhi & the NCR

Abstract

This study examines the Indian health insurance market by empirically observing the provider’s perceptions and its relationship with the insured, the insurer and the third party administrators (TPAs). The study tries to find out the awareness level among the insured population and their attitude towards treatment cost. It then examines the role of TPAs and the impact of cashless services on the cost of treatment by studying a few cost drivers. Apart from studying the provider’s per-ceptions it also tries to look at some of the evidence of moral hazards and that of fraudulent activity. The findings suggest that the awareness level regarding policy terms and condition is low among the insured population and most of them do not care for the cost of treatment. The providers increase their rates quite frequently and prefer the middle income group for extending cashless benefits. The TPA model has not been successful in bringing down the claim cost but has helped in providing unbiased services including cashless benefits. The price structure of healthcare services are linked to the room rent category and most of the insured patients, who are more demanding, prefer staying in higher category rooms. The concept of cost-sharing by the insured will help tackle this issue to some degree. The Indian health insurance market is not immune from supply-side moral hazards and fraudulent activities and there is a need to craft different strategies to tackle them. There exists an opportunity for the insurance companies to build long-term relationships with the preferred healthcare providers by using technology and by understanding each other’s roles in serving the common client.