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( By Dr Aniruddha Malpani )

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Chapter 14 - Why Information Therapy makes business sense for health insurance companies

Ketan Shah, a sales representative for a major heath insurance company, has his work well cut out. The senior management has asked him to maximize sales of insurance policies to keep the company ahead of its rivals. Yet, this is a very short-sighted approach. Instead, if the company looked beyond the obvious profit motive and directed its efforts towards ensuring the health and well- being of its clients, this would not just attract more customers and increase revenue, but also build lasting relationships.

Providing Information Therapy to their customers makes tremendous business sense!

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 purchasing a health insurance policy to protect yourself against the financial losses caused by a medical problem has become so important. Medical care has become increasingly expensive and un affordable and a health insurance policy can provide financial protection, ensuring that 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 healthcare services after they have been provided. In most indemnity insurance plans, patients are free to choose their own doctors or hospitals. In the past,

the health insurance business in India 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!

Given the huge Indian middle class; the fact that medical care costs are escalating every year; and that the government infrastructure is not able to provide basic healthcare, experts believe that the health insurance market is going to boom over the next few years. However, for historical reasons, most health insurance companies in India are still losing money and scrabbling for market share. This is actually a great opportunity for a health insurance company, which is willing to think out of the box, to stand out from the crowd.

What do customers want from a health insurance policy?

Their basic needs are protection from financial loss because of hospital bills; free access to doctors and hospitals they want to goto; no fine print for exclusions; reasonable costs; convenience at the time of hospitalization so they 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, since there are so many companies competing for business, they all have great marketing campaigns and are happy to sign up customers left, right, and centre 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 is collect the premium every year and pay the medical bills (claims) when customers fall sick

and need hospitalization. What's worse is that while they are very efficient at collecting the premium, when it's time to pay out the claims and settle the hospital bill, they create a lot of unnecessary hurdles in order to delay making the payment, causing a lot of grief and anguish to the customer. This is why health insurance companies have received so much bad press recently.

This is short-sighted. Remember that a health insurance policy should not just provide illness care, but should also help us to remain well. In the USA, which has the most evolved health insurance market, things are very different. Insurance companies have realized that spending on medical care after a person falls ill is expensive for them. It is much more cost- effective to invest money in educating, counselling and motivating people to remain well, so that they do not fall ill in the first place-after all, prevention is better than cure.Infact, 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. Innovative health insurance companies in India need to come up with a modern version of this model - and providing Information Therapy is a great way of doing this.

Now, there are many options available to insurance companies which they can use to help their customers remain healthy. These include tools for counselling, lifestyle improvement, weight loss, and smoking-cessation programs. Many of these can be provided online, which makes them inexpensive to deliver. Just look at the wellness tools which the United

Healthcare website at wellness.htm offers to its U.S. customers, or the Aetna website at And compare this with any Indian health insurance company website. The difference is clear.

Indian health insurance companies need to leapfrog and use the Web to deliver Information Therapy to their customers.

Most affluent Indians are now online and because it's so inexpensive to develop web services and applications in India, it's very cost-effective for insurance companies to deploy these. Once they have the email addresses of their customers, they can encourage them to submit their claims and pay their premiums online - again saving both the insurance company and the customer time and money. They can also offer discounted memberships to gyms, spas, yoga classes, meditation retreats and counselling sessions, to help their customers adopt a proactive approach in managing stress and fighting off disease.

Similar tools can be used to help patients with chronic illnesses manage their disease better so they don't need hospitalization.

Hospital care has become very expensive and teaching patients to take care of themselves is a powerful therapeutic intervention. This is called 'disease management' and is an integral part of providing Information Therapy. It 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 they don't need to spend too much on them either. An excellent example is the recent study from Partners Health Initiative (PHI) in Anderson, South Carolina which showed that 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 Information Therapy, but it's also a great way of helping them win more customers and keeping their customers happy. Knowledgeable customers should demand that health insurance companies provide them with Information Therapy tools to promote their health.