Here’s why Irdai needs to mandate outpatient cover in health insurance

There is an underlying need for fixing the ailing health care system by providing comprehensive insurance including outpatient insurance i.e. any medical treatment that does not require hospitalisation or an overnight stay at a medical facility of any sort. This will help in improving health care indices and decreasing the cost of health care in India.

Out of pocket expenditure for healthcare in India stands at 62% of the entire expenditure and out of which only 27% of the population is insured. Healthcare expenses in India are largely focused to cater to the in-patient or institutional expenses related to health care. There is a need to take a leap in healthcare spending on the outpatient side as well.

Outpatient coverage

In developed countries where both inpatient and outpatient insurance is available, the maximum amount the patient will pay out of pocket is capped. In India, insurers provide inpatient coverage that is significantly restricted. There is a cap on the limit the inpatient encounter will be covered for based on the premium paid. There is a restriction based on age, congenital and preexisting conditions as well.

The outpatient insurance in India is included as an afterthought in most of the inpatient policies with the number of outpatient visits being restricted and no clarity about what is actually covered. The reason could be that providing all this will increase the premiums significantly and maybe unaffordable for many. However, it can be made available for those who can afford it and also create different plans that are suitable for different budgets.

Insurance coverage is restricted in India is because of the potential for fraud. However, it has come down because of the availability of fraud detection methods and improvement in documentation. This has also lead to a better accountability from hospitals and doctors to provide the standard of care and document the same. It may not be easily possible to detect fraud in the outpatient setting because of the number of encounters that will happen and lack of requirement for documentation.

Potential for fraud will be exponentially high if we include the investigations and treatment that will have to be paid for along with the consultations. With the government embarking on the journey of digitisation where every outpatient visit is documented it should be much easier to detect fraud. Third party payers will also ensure accountability and documentation in the patients who have outpatient insurance. This will in turn lead to better treatment and outcomes for patients and decrease the cost of health care in the long run.

Way ahead

Implementation of outpatient insurance coverage will open other areas for investment and job creation. The use of technology will help in fraud detection and prevention. This along with improved documentation will need the startup community to come up with novel solutions. For example facial recognition and AI can be used to document and monitor patient visits and claims. Outpatient claims processing can be automated.

Though the MCI doesn’t mandate private practitioners to maintain outpatient medical records, the electronic documentation of outpatient health records will be mandated by third party payers. This will help patient records to be comprehensive and help care giver keep track of both outpatient and inpatient care that their patients have received. With security of health care data being critical, block chain can be used to maintain the privacy and security of medical records.

The IRDAI needs to mandate the private insurers to provide outpatient insurance. Better outpatient care and preventive health care is the only way to heal the current broken system. Failure to have comprehensive insurance including outpatient insurance in both private and government systems will lead to sub optimal health care that we can ill afford.

Souce: Financial Express