The stand-off between the four state-run insurance firms and leading hospital chains like Apollo, Escorts/Fortis and Max, is inconvenient for patients. But the decision by insurance companies to withdraw their cashless payment facility was inevitable, given the evidence of vastly inflated bills from these hospitals. In effect, the insured patient now has to pay the bills presented by the hospital, and the insurance company will decide later as to the amount that it considers reasonable and will reimburse. Indeed, there are also reports of the insurance firms engaging detectives and super-speciality consultants to examine bills in detail.
That the private hospitals may have been padding bills is entirely believable; corporate hospitals are not the best examples of patient-centric conduct, and there is no shortage of anecdotal evidence of doctors ordering superfluous tests in order to raise the billing level. But these problems are not unique to India, they have been experienced in other countries as well, and the insurance sector has come up with a variety of responses. One is co-pay — the insured person has to pay an agreed percentage of all bills and, therefore, has an interest in keeping bills low.
The hard fact is that corporate hospitals, whose business is paid for by insurance companies catering to relatively affluent patients, are no substitute for public hospitals, which are few, under-funded, under-staffed and over-crowded. Indeed, even government employees covered by the Central Government Health Scheme (CGHS) are now encouraged to go to the corporate hospitals, with the CGHS picking up the tab (said to be lower in most cases than what is billed to the insurance companies!). Governments have tried to bridge the gap by giving private hospitals subsidised or even free land, in return for the promise that a specified percentage of beds would be reserved for poor patients who would get subsidised or free treatment. The scandal is that the corporate hospitals have invariably reneged on such promises, and not been held to account. The other malpractice, on which the Medical Council of India or its successor should crack down, is the business of giving doctors a percentage cut on the bill, thus incentivising doctors to become party to the price-gouging. So, it is just as well that the four state-owned insurance firms have decided to form a Preferred Provider Network of hospitals which agree to charge patients within a price band for various medical procedures.
