Four years ago, 32-year-old Hemant Gupta found out he had a benign tumour in his intestine. An easy procedure — both surgically and monetarily — helped him return home within a week. But in June this year, Gupta discovered the tumour had recurred and this time, chances were, it would be malignant. A series of tests later, doctors at an upmarket South Delhi hospital told Gupta he had to undergo surgery immediately. And that he had to cough up Rs. 6.5 lakh in cash there and then.
Puzzled, Gupta called his insurance company, only to be told that if he wanted to get his procedure done at that particular hospital, he’d have to take care of it himself. “My insurance company told me they had restricted cashless transactions with this hospital a week ago. And that if and when the issue was resolved, I could claim my money from them, that too not the whole amount,” said Gupta, who works with a private bank. “And there I was sitting in my dressing gown, ready to go in for surgery. I had to take a decision quickly.”
Even as Gupta arranged for the money from friends and relatives, it was the aftermath of the surgery that was tough to deal with. “I had to repay people, so I took a chunk out of my savings. Then I was advised to go in for chemotherapy, something I didn’t realise cost so much. So, I had to break some of my fixed deposits and was forced to downgrade my car,” he added.
Gupta’s story may not sound new to three per cent of India’s 120-crore population, who invest in health and medical insurance. What is new for these 2.4 crore people is the realisation that those with medical insurance may get as raw a deal from certain hospitals, as those who haven’t invested in health insurance.
‘No longer cash-less’
Starting July 1, more than 18 insurance companies including public sector ones such as Oriental Insurance, New India Assurance and National Insurance decided not to cover hospitals like Apollo, Fortis, Sir Ganga Ram, Max and Medicity in the National Capital Region and at least a 100 in other cities like Mumbai, Bangalore and Chennai, under their cashless facility scheme.
A month after the tussle between public insurance companies and hospitals began, medical insurance policy holders entitled to cashless treatment are deferring surgeries. “What’s the point of paying premiums for a cashless policy if we have to pay for the treatment from our pocket? The purpose of having a policy is defeated,” said Geetika Rana, a multinational corporation executive, who has postponed her father’s knee replacement surgery.
The bigger private hospitals in Delhi are getting as many as 10 denials a day from public insurance companies for pre-sanctioning of cash-less treatment facilities for individual claims. “On July 1, we got the first cancellation for a cancer patient who had to undergo chemotherapy. Since then, we’ve been getting as many as 10 denials a day in each of our six branches,” said Sanjay Rai, director, marketing and customer management, Max Healthcare.
The provocation? Insurance companies say that hospitals and doctors are overcharging patients who are insured. That the facilities are overpriced and the bills inflated. “This year itself, the healthcare industry lost Rs. 1500 crore. Every year public sector insurance firms are losing more that Rs. 300 crore each,” said an official in New India Assurance. “We’ve taken this action to curb such fraudulent claims.”
Caught between hospitals and insurance companies, the people are the biggest losers. Abhishek Shekhar, 39, has been in the queue for a kidney transplant since August 2008. While his company has already spent more than Rs. 4 lakh for his treatment, which includes dialysis and tests, Shekhar has also spent Rs. 3 lakh from his own pocket, a part of which was reimbursed by his private insurer. “I learnt only a week ago that a match had been found for me. The surgery will cost me Rs. 10 lakh and the after-care another Rs. 6 lakh,” said the sales head at a leading MNC in Gurgaon. “While we’ve been saving up for this eventuality for two years now, the procedure would wipe out my savings of a lifetime.”
Shekhar has already begun looking for a house where he won’t have to pay more than Rs. 12,000 as rent. “We’ve had to put our apartment for rent, and are moving to a cheaper area in Delhi so that the kids don’t have to suffer,” says this father of two. “But what will happen if the insurance companies don’t reimburse us? It’s scary since we’ve been going to this hospital in Gurgaon from the beginning. And we have to go through all the tests and the waiting all over again in a new hospital.”
Playing with life
Shekhar’s concern is justified but fraudulent claims have insurers worried. A recent survey conducted by Marsh, a third party administrator, suggests that around 10-15 per cent of the total claims in the country are falsified and that India loses more than Rs. 600 crore on false claims every year.
“A visit to the urologist last year, was an eye-opener about how doctors gauge a person’s worth,” says 32-year- old marketing professional Ketaki Shah, who underwent a surgery to remove a stone from her gall bladder. “He started questioning me about where I worked, what my father did and finally asked me if I was insured. I was told that the surgery would cost about Rs. 1.5 lakh. It was as if he was trying to gauge if I could cough up the money.” Subsequently Shah went in for a second opinion. “And when the same round of questioning began, I told them that I was not insured. This time, I was told that the surgery would cost Rs. 65,000, nearly half of what I was told by the first doctor.”
Why was there such a big difference? The first hospital offered five-star facilities, the best post-operative care and customised menus, which is why she’d have been paying the additional Rs. 90,000, Shah was told.
Claims such as these have put insurance companies on guard. In a joint statement last week, National Insurance, New India Assurance, Oriental Insurance and United India Insurance promised people they were “working out package rates and stabilising hospitalisation costs to benefit the insured in many ways.”
“To expect us to provide facilities at government rates is irrational. You can’t compare a 30-bedded facility with a 500-bedded super-specialty hospital. We need to look for sensible, rational guidelines keeping the interest of patients in mind,” said Dr Sanjeev Bagai, chief executive officer, Batra Hospital and Medical Research Centre.
The Confederation of Indian Industry (CII) is also mediating for talks between hospitals and insurance firms.
“We are looking to do three things: grade hospitals on facilities, figure an average rate for particular surgeries and find a way to lessen the burden on the general public,” said a CII official.
Till then, people will have to find a way not to fall ill.
Inputs from Rhythma Kaul