Monday, May 14, 2012

Insurance dilemma and the outstanding billing issues.

In the United States the recent trends indicate that the uninsured population is rising and is at a high of 17 to 20% of population left uninsured. There the problems are very different and law suits against patients are common for un-paid bills which run in millions. Hospitals are also being sued by patients for aggressive payment collections methods for defaults and news articles are many citing incidents of payment sleuths from hospitals asking for money inhumanely in the emergency rooms from the uninsured.

Well the scenario is different here in India.

The insurance reach is less than 2%. And majority of payments are out of pocket.

However widespread grievance by a lot of INSURED patients is a little different.

They complain of jacked up prices when they informed the hospital that they were eligible for cash less services.

According to a recent survey as cited in Forbes, when the pricing for hospitalization was compared between insured and uninsured there was a striking upward billing of upto 40% for insured patients in comparison to cash paying patients.

This indicated obvious unethical billing and suspected collusion with many TPAs. This was bound to force many insurance companies to do away with TPAs and fixing certain costs of procedures.

The matter will only worsen over a period of time and will further lead to a disillusionment of patients from Insurance due to such instances and hassles, and the insurance penetration will not rise to a desired level.

With inflation and cost of health care rising, problems are going to worsen a lot leading to unutilized beds and non-competitive revenues and EBITAs. The problem of un-paid bills from TPAs to the hospitals and individual patients is on the rise. The reasons are many for the same but leads to a situation where either patients stay away from such hospitals, hospitals stay from such

TPAs and Patients stay away from getting insured.

However there is enough time to bring in trust among stakeholders:

Hospitals should look at long term solutions to acquire patients and not give into unethical referrals. Today majority of the hospitals pay 20% as referral fee, the competition will pay 30% tomorrow, and then how long will you up the scale? Effort based engagement with patients will build trust and cost of acquisition will be much lower. Leading to higher profit centres.

Hospitals should keep the tariff standardized for all kind of patients for the same class of beds. It should not change from opportunity to opportunity. The pricing for insurance too should not change.

In the long run Insurance companies will prefer such hospital who do competitive and standardized billing.  Many hospitals now doing away with bed class wise exponential billing and only charge extra for the room type and not the services. This makes all stakeholders happy.

Hospitals should invest time in making good all-inclusive packages with no variable. Its not that it can't be done. This will increase trust and competitiveness.

Hospitals should list their prices transparently and on all its communication channels including the website.

Hospitals should not take legal action against any patient. This will be like axing ones own foot. It will only lead to bad publicity. A gesture of good-will shall create a word of mouth to compensate for your loss if any.

Train your staff, specially the billing and customer care. A nice gentle but persistent followup with patients or relative every day reminding of their outstanding will sort out billing issues in majority of cases.

It is advisable that a tactful dedicated team (depending on the size of hospital) be assigned for such tasks.

Focus on 'Customer satisfaction'. That is what will make you survive in the business of healthcare.

Remember patients are only becoming more educated and informed.


Dr Akash S Rajpal
EKOHEALTH Management Consultants PVT LTD,
Awardee, Ramanujan Bose Award 2012:!2012-prize
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