Traditional insurance coverage is mainly limited to expenses within tertiary care hospitals. Even those who carefully review their policies and choose plans that seem to offer comprehensive coverage can find themselves facing unexpected expenses, leaving them vulnerable to significant out-of-pocket spending. Almost 70% of healthcare spending in India is out of pocket today. For example, an individual diagnosed with a heart condition will require daily medication, regular visits to the cardiologist, medical tests, dietary changes, and other hidden and uncovered factors contributing to costs.
Even for those not battling chronic and critical illnesses, uncovered medical expenses from dental procedures, prescription medications, and supplements can deplete their savings. Most importantly, there are significant hidden costs in out-of-pocket expenses – referral fees, supply chain leakages, and super normal profit margins of certain providers can contribute up to 50-80 paise for every healthcare rupee spent. These compounding and opaque costs deter customers otherwise amenable to taking proactive actions to live more fulfilling lives.
There is a pressing need for a more comprehensive approach to healthcare coverage that addresses these gaps and offers peace of mind to members. Technology can be a key enabler in bridging these gaps and building a more equitable, accessible healthcare system that promotes a health-first mindset. This article will explore some of the most pertinent gaps and substantial expenses that traditional health insurance doesn’t cover and how technology can intervene for more secure and holistic solutions.
1.Exclusions and Limitations: Most traditional healthcare insurance policies cover only hospitalisation or emergency care, leaving routine and regular health checks, prescription medications, and preventative measures uncovered. Without comprehensive coverage, individuals may delay seeking medical attention, leading to more severe health problems and higher costs down the road.
2. Non-Medical Healthcare related costs: While traditional healthcare insurance policies provide coverage for a wide range of medical expenses, non-medical costs related to healthcare are often overlooked. These expenses include transportation costs, consumables, home healthcare services, etc., which can be significant for individuals with long-term illnesses or disabilities. While such services can provide essential support for individuals to live independently, traditional healthcare insurance policies often do not cover them.
The lack of coverage for non-medical healthcare expenses can create a financial burden for individuals and families who are already dealing with significant healthcare costs. It can also limit individuals’ access to necessary healthcare services, ultimately affecting their health outcomes.
3. In network vs out of network: Traditional healthcare insurance policies often have restrictions on which healthcare providers are considered “in-network,” often resulting in limited options for care. Moreover, in-network providers may not always be the best fit for individuals, as they may not specialise in certain conditions or may be located inconveniently for the member. Seeking care from out-of-network providers can be cost-prohibitive due to higher deductibles, copays, and other unexpected out-of-pocket expenses.
Additionally, individuals do not have control over whether their healthcare provider is in-network or out-of-network. For example, individuals may not have the luxury of choosing an in-network provider in emergencies. They may have to seek care from the nearest available healthcare facility, which may be out-of-network and, therefore, inconvenient.
4. New procedures, drugs, diagnostics, dental and vision, etc.: As medical technology advances, breakthrough strategies emerge, offering promising opportunities for patients with complex medical conditions. However, these innovative procedures often come at a steep cost and may not be covered by standard insurance plans. For instance, an individual who has experienced kidney failure after a transplant and has been on dialysis for several years may opt for advanced treatment like a robotic kidney transplant. This new technology offers patients potentially better long-term outcomes and new hope for a better quality of life.
However, since this procedure is still considered experimental and not widely available, it may not be covered by traditional insurance plans. The lack of coverage for innovative procedures can be incredibly challenging for patients who have exhausted conventional treatments and have no other options for managing their medical condition.
Moreover, basic and routine dental and eye care procedures are often not covered under traditional health insurance policies, leaving individuals with chronic and genetic problems like glaucoma and myopia vulnerable. Dental and eye care are often considered separate from standard medical care, so insurance policies may not cover them.
Technology can offer solutions to the complex problems listed above through:
1. In the past, insurance coverage often excluded various healthcare expenses due to their “non-probabilistic” nature. However, with the aid of technology platforms and population utilisation data, we can now develop health plans that cater to customers’ specific needs and preferences, ensuring they can make the most of their coverage.
2. One-to-one integrations with payers and providers: It is not just about selling health plans; it is equally important for customers to utilise the benefits they offer conveniently. Technology platforms play a crucial role in enabling this through digital integrations. By consolidating various services in one accessible location, customers can conveniently access all the advantages they are entitled to. Additionally, storing outcomes such as prescriptions, reports, and more in a centralised platform simplifies the overall experience for customers.
3. Artificial Intelligence-powered nudges and coordinated care: Platforms can utilise population data to predict which health actions may be effective for individuals and encourage them to engage in these activities. Furthermore, platforms can facilitate meaningful care coordination, such as scheduling a doctor consultation following a blood test. These efforts aim to assist customers in making progress toward their desired health outcomes.
In addition to the benefits mentioned above, these platforms also play a vital role in making customers aware of their current health insurance coverage, thereby improving transparency. By serving as a centralised destination for various healthcare needs, these platforms make healthcare more accessible and affordable. They simplify the healthcare journey, and enable individuals to make informed decisions about their healthcare options.
-The author is Co-Founder and CEO, Alyve Health. Views expressed are personal.
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