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From curative to managed care

Increase in capital flows, better medical equipments are few of the features the opening of the insurance sector holds.

The opening up of the insurance sector will not only increase the number of people covered by health insurance but will also increase capital flows into this sector for increased hospitals, better medical equipment etc.

With all this, will come intermediaries like service providers and other intermediaries like health management organisations, preferred provider organisations, third party administrators etc who would not only assist in increasing the coverage but also in improving the quality of overall medical services.

Another change that will come about with the opening up of the sector is the transition of healthcare from curative to managed care. While pure health care concentrates on the curative, managed care goes into the aspects of both curative and preventive healthcare.

Managed care:

The concept of managed care has its roots in the scenario of rising medical costs and preference for preventive health care by individuals. Managed health care benefits the insurance companies in two ways. First, by virtue of an almost assured usage for preventive care, it allows them flexibility to negotiate discounted price structure with service providers and second in the long term as overall claims cost go down substantially.

Managed care plans are so popular in the US that they now employ more than 70 percent of all the physicians in the country. Private health insurers will however target only the affluent section of the society. It remains the responsibility of the government to ensure that the underprivileged section of its population also has effective access to healthcare.

Given its budgetary constraints, the government requires to have an effective financing mechanism that ensures that the section of its population who can afford to pay for healthcare, does so, and at the same time there exists a safety net for the poor.

It is in this context that an effective social insurance system where mandatory earmarked taxes are collected from its members provides a good channel to shift a portion of the public burden of financing health care to the private sector.

A number of countries in Asia like Korea, Malaysia, Indonesia, Thailand have either already implemented or are actively considering introducing social insurance. In the Indian context there are a number of ways of mobilising private resources through social insurance to reduce the financing burden of healthcare on the government and at the same time ensuring that the poor and indigent are not deprived of healthcare.

• Mandatory social insurance for people employed in the organised sector, with appropriate contributions from government, employees and employers.
  
  
• Community insurance for rural populations, operated at the 'Panchayat Samiti' levels.
  
  
• Voluntary social insurance to be encouraged for people who are employed in the unorganised sector.

With the growth of health insurance, the entire structure of the health industry with the delivery mechanism, quality standards and regulations is likely to undergo a great change leading to the entire system becoming more customer focussed. It, however needs to be ensured, through legislation that the cost of healthcare delivery must be kept under control and not allowed to balloon up, as has been the unfortunate experience of some countries like Korea.

So, next time one has to get a patient admitted into a hospital in an emergency, it may no longer be necessary to scramble to collect money to pay the deposit, call up influential people to arrange for a hospital bed and to stand in various queues to finish the lengthy paper work before the patient is admitted. All one may have to do is to carry the identification card provided by the insurance company, go to a designated hospital and get the patient admitted.

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