There's been a lot of discussion lately about health insurance and its economics. The basic problem is that hospitals charge far more from patients who have health insurance, and the insurers are bleeding money as a result. It's common knowledge that private Indian hospitals that are reputed to be good (regardless of whether they are actually good) tend to charge breathtaking amounts — but they charge even more when an insurer foots the bill.
The insurance industry wants hospitals to charge less or be removed from the cashless list. Hospitals claim that providing high-quality care has high cost and the IRDA, predictably, thinks that the solution lies in insurance customers paying more to insurance companies. However, hidden behind these conflicting opinions is an alarming fact — our dysfunctional public health system, combined with profit-driven insurance and healthcare industries will inevitably add up to disaster, no matter which way the current crisis is solved.
The facts are very simple. Around the world, people's access to reasonably-priced and good quality healthcare is linked to the viability of their countries' universal public health systems. Unless a large mass of people are content with zero-priced (or close to zero-priced) government doctors and hospitals, there's nothing to keep the private healthcare and health-insurance industry honest. What you are seeing right now is a battle between the two which is about which of the gets to keep more of the money they shake down the patients for.
That the patients are going to be shaken down hard is a given. And the ultimate blame lies not with these two but with the state of public healthcare. Mostly, people will pay any amount of money to any alternative rather than choose all but a handful of elite government hospitals. If you want to see which way we are headed, look up healthcare quality statistics for richer countries. The less functional the publicly-funded universal healthcare, the more the dependence on private insurance and private healthcare, the worse is healthcare delivery. Without anyone saying so aloud, this is a battle that seems already lost in India.