'Removal of tariffs will boost insurance' : IRDA Chairman

New Delhi, Oct.5 : "The healthcare industry has two concerns: insurance and removal of tariffs. Once tariffs are removed, insurance will get a boost, said C.S. Rao, Chairman, Insurance Regulatory and Development Authority.

He was speaking at the Health Insurance Summit organized by the Confederation of Indian Industry ( CII), here today. It has also prompted the general insurer to pay attention to health insurance. Also required are discussions on pre-existing diseases. With senior citizens unhappy with the existing health insurance schemes, Rao added that this is an issue that needs to be addressed.

Health insurance forms a small part of insurance. With 75 percent of the Indians residing in the rural areas, more doctors need to be posted in these regions. Also, the poor have still to be taken care of by the government since it is only a miniscule number of people from the society that can pay for health insurance.

G C Chaturvedi, Join. Secretary and Mission Director, National Rural Health Mission, Ministry of Health and Family Welfare, opined that the healthcare sector will look different by the next decade. With an addition of 0.11 beds per annum and 100 million Indians covered by self-funded government schemes, most public private partnerships will reduce high out of pocket health insurance. Regulatory mechanisms also need to be enforced. The poor need to be insulated. Chaturvedi called for more corporate social responsibility adding that insurance companies are now grading cities to design customized policies.

According to Dr Prathap C Reddy, Chairman, CII National Healthcare Council and Chairman, Apollo Hospitals, health is the most neglected industry despite contributing to over five percent to the National Income. It is mainly because of the lack of awareness and disinterest among the masses on the whole.

Currently, there is one Primary Health Centre for every 30,000 people and only six maternity beds. For the 75 percent of Indian population residing in the rural areas, there are 31 percent of hospitals, 18 percent of beds and only 25 percent of qualified allopathic doctors. Insurance is no longer the domain of the rich. In the light of changing lifestyles, escalating medical prices and falling purchasing power, medical treatments are slipping out of one's reach.

There are a host of insurance policies available today to choose from mandatory, public, private, employer based to community based schemes. Some hindrances to the growth of Health Insurance Industry include the 24 percent of below poverty line and 35 percent of illiterate population.

As per the study undertaken by the WHO, the insurance in India is mainly financed from out of pocket expenditure in comparison to all other countries involve in the study including China, Sri Lanka, Vietnam to mention a few. India has a huge population base; there is immense potential for the industry to grow in future. While the government is working on the regulatory issues on one hand, the private sector is looking at insurance expertise and product design.

"Unlike Life Insurance, in case of health insurance, there are multiple stakeholders involved and it is important for all of them to work together to make a success of this. This Summit has tried to assemble a confluence of industry players on a common platform to explore and arrive at a consensus on key directions," said A Vaidheesh, Summit Chairman and Managing Director, Johnson and Johnson Medical. An aging population and an increase in lifestyle diseases will push the demand for hospitalization. It is important to recognize health as continuum and not as a point of reference. "The Summit will prove constructive for the vast array of issues affecting growth of this industry and the economy as a whole."

Calling for a broader view of healthcare costs and an improved healthcare infrastructure, he said that by 2015, health insurance will cover 20 percent of the Indian population.

Providing an insight into the insurer's mind, Mr DD Singh, Executive Director, Health Insurance, Life Insurance Corporation of India, stated that an insurer faces difficulties while choosing a product. Cost, quality and access decide the success of health insurance. The insurance companies need to talk about the mindset of the customer.

According to Jean-Michel Chatagny, MD, Client Market Asia, Swiss Re, in 2004 the world spent 4.1 trillion dollars on health. India has very less expenditure on health. Privete insurance is very low and has the lowest percentage of government spending among the BRIC countries. The Swiss government encourages purchase of health insurance. India has potential for private insurers. Also, the care delivery infrastructure needs to be overhauled and the government has an important role to play, he said.

In his welcome address, Banmali Agrawala, Deputy Chairman, CII Western Region and MD Wartsila India Ltd. said that the first ever health insurance summit in India is an attempt to remind people of the importance of 'forgotten' health and health insurance to keep up with the fast track life. An indirect advantage of health insurance is that it keeps medical costs and practices under check. With the opening of the Insurance Industry to FDI, large amounts of funds have been flowing in. (ANI)

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