'Educating consumers is crucial'

Posted on August 6, 2010 | View 715 | Comment : 8

The spread of affordable healthcare across communities is being linked to availability of customised insurance solutions for consumers. Vaatsalya Healthcare Solutions, a start-up company that operates a chain of low-cost hospitals across tier-II and III cities in Karnataka and Andhra Pradesh, has devised a microinsurance scheme for which they are seeking a grant from the Microinsurance Innovation facility, ILO, Switzerland. In a conversation with ET, V Renganathan, co-founder and vice-president (alliances) of Vaatsalya, explained why low-income consumers need a scheme that covers both hospital care as well as out patient consultation costs.

artical Picture What are the main points that you are proposing in the microinsurance scheme?
Health insurance in India generally covers only in-patient hospitalisation. Any out-patient (OP) services such as doctor consultation, drugs, and diagnostics are not covered and they are all “out of pocket expenditure”. According to one study, the urban poor might be spending as much 2,400 a year on out-patient services.
So they can really benefit from OP coverage. Vaatsalya is proposing that when people buy insurance, they also get a fixed number of coupons that they can exchange for medical consultation. We will price the product around 600-700 with an insured sum of 30,000 for a family of 4-5.

What were the factors that influenced the design of this scheme ?
In the semi-urban and rural areas where Vaatsalya operates, very few people are insured (for healthcare). Microfinance institutions took a lead in designing and marketing health insurance, but they have not been highly successful because of the inability to get quality providers; cost of insurance marketing and servicing the insurance product; and also fraud.
We believe Vaatsalya can learn from these experiments to design a plan that meets the interests of all stakeholders including insurance companies.

What impact will this scheme have on improving access to healthcare for lowincome consumers?
Currently, people pay out of pocket. Hospitalisation requires thousands of rupees, which they usually borrow (probably at high rate of interest) or by selling their assets. If we could educate our customers about insurance and they pay the premiums regularly, then they will be protected.
We also should know that they have limited budgets, so the insurance must come with certain OP benefits, which will reduce the overall burden for the low-income groups.

What role do insurers play in rolling out low-budget health care facilities?
Insurers want low-budget healthcare but they are not building or helping to these facilities. However, there are examples of hospitals created to serve insurer’s clients, such as Kaiser-Permenante in USA. Insurers can collaborate with hospitals like Vaatsalya, which provide affordable healthcare, to create such an environment.

What is the status of your application for a grant?
We have just submitted an application for a grant to the Microinsurance Innovation facility, ILO, Switzerland. In order to be funded, the idea has to innovative; replicable by others; and at the same time economical to low income groups. Our scheme offers both in-patient and limited out-patient services for less than 2 a day for a family of 4-5 members.

V Renganathan

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Comments (8)

  • Great Initiative !! There is a need for the following and your system will support this :

    - Transparency and efficiency of processes and costs in hospitals, insurance providers & TPAs. Survival of The Fittest and Adaptable. Benefits should flow to patients.
    ...See More

    Posted by JPSingh , Management Consultant at Justplainandsimple Consulting Pvt. Ltd. | 14 Aug, 2010

  • Dear Mr Ranganathan
    Excellent initiative ,. need of the hour of indian health care scenario presently.
    Go ahead .It would serve the purpose of poor & middle class peoples interest & offcourse tremendous business. Pls keep touch if necessary any association from my side for eastern zone( bengal,orissa,NE.)

    Chittaranjan Das
    executive ,
    columbia asia hospitals group
    Ex- clinical specialist
    Kings college hospital,London,uk

    Posted by chittaranjan Das , Snr .manager (operation) at columbiaasia health care | 07 Aug, 2010

  • Fantastic idea, but needs extremely proper implementation with full and whole hearted support from our govt.
    Based on the experience at AP&karnataka, pl. come to Tamilnadu.

    Posted by Balasubramanyam | 07 Aug, 2010

  • Your proposal is the ultimate expected by the people in India. Send me details when it is approved and I wish to be asociated in promoting it

    Posted by John diwakar , agent advisor at Max New York | 06 Aug, 2010

  • Dear Sir,I am very much impressed with this scheme when i can benefit many families i would be willing to work as your agent or representative and help people avail this facility and also grow financially if there exist any opportunity.please provide more details in this regard.It would mean a lot to me to serve people,derive a lot of satisfaction and also meet my personal needs.

    Posted by R.RAMESH KUMAR , Gold smith at self owned | 06 Aug, 2010

  • In India it is high time to introduce micro health insurance facility because the patients who needs only out patient treatment, forcible y stays in the hospital to get the insurance. claim So the insured is wasting the time by unnecessary stay in the hospital & insurance co is settling these type of claims & incurring loss. Let the insurance co think wisely

    Posted by k.aaronic , insurance investigator at prop. | 06 Aug, 2010

  • This might prove to be a great step in raising awareness of healthcare amongst low income groups. what needs to be seen is the quality of service that these low cost hospitals will provide to the customers.In any case OP services is the need of the day and companies have to come up with plans to offer these services to the customers.

    Posted by Amit Agrawal,Training Manager at Aegon Religare Life Insurance Co. Limited|06 Aug, 2010

  • It is really a wonderful scheme which can be a boon to low income group patients in other parts of India.I would request Vatsalya to replicate the scheme in Mumbai and Maharashtra after launching in AP. tHEY COULD ASLO WORK OUT SOMETHING FOR THE MIDDLE CLASSES

    Posted by Balasubramanian mahadevan,|06 Aug, 2010

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