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The Burgeoning Indian Health Insurance Industry…… Yet miles to go !!! IIRM - National Seminar on “A Decade of Experience: Health care Insurance…. Present Scenario”, 24 th January, 2012. V. Jayalakshmi Siva Sivani Institute of Management Hyderabad. Presentation Outline. - PowerPoint PPT Presentation
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The Burgeoning Indian Health Insurance Industry……Yet miles to go !!!
IIRM - National Seminar on “A Decade of Experience: Health care Insurance….
Present Scenario”, 24th January, 2012
V. Jayalakshmi Siva Sivani Institute of Management Hyderabad
1
Presentation Outline
Indian Health Insurance – bare facts
Objectives of the Study
Methodology
Household Survey Analysis
Summary and Conclusion
Brief Background
Indian Economy : LPG ………year 2000
Insurance industry ‘engine for growth’
Consumers today have choice and variety
JAYALAKSHMI 3
Health Insurance Facts
Rs 7,803 crores in year 2009-10, CAGR of 25-30% Poised to grow to Rs. 28000 cr industry by 2015
Out of the total population 15 % - covered under all prepaid schemes 2 % - covered under private insurance
Total healthcare expenditure constitutes 5% of GDP Public Funding – 1% of GDP OOP spending – 76%
HEALTH INSURANCE – A NECESSITY TODAY
4
Health Expenditure in India by Source of Financing
5OOP – SIGNIFICANT AND BURDENSOME
Universal Truths & Facts Private health care expenditure is greater than that of
public health care
Little preference for Government health delivery system vis-à-vis the private
Reliance on the government need to be reduced
Voluntary health insurance schemes – globally acceptable model
Health insurance plan - income protection plan
6JAYALAKSHMI
Key Stakeholders
7“ Policyholders” – missing
General Insurance Premium composition [2003 – 09]
8Health insurance significantly contributing ………..
Health Insurance Premium Growth [2003 – 09]
9
Indian Health Insurance Market- 2010-11
10
INDIA RANKS : • 78th in terms of insurance density• 52nd in terms of insurance penetration• OOP expenses met out of * Borrowings / * Sale of assets / * Past Savings * Current incomes
Huge market to tap……
JAYALAKSHMI 11
NCEAR (2008) Survey Report: Penetration 1.2 per cent (US – 4.2%)
ASI of Rs 98,604 per policyPopulation covered – just 15% Population covered by Private Health insurance companies – 2%
Huge untapped market
Indian Heath Insurance Estimates at a glance
Total health care spending in India - 1.7 lakh crores [2007-08]
Insurers’ payouts barely Rs. 5,000 crore!!!
Rs. 1,00,000 crore - OP Treatment (non-hospitalization) expenses and
Rs 70,000 crore - hospitalization expenses
Insurers’ claims - 100-105 % claims
[ 2007 - 2009]
Total Healthcare spending at a glance at Macro level……..
Out of an average annual income of Rs 62,114, an Indian household spends
6.7% (Rs.4,079) of income on for routine medical expenses
37.4 %(Rs.23,237) of income for major sicknesses
Huge Out-of-pocket spending!!!
Micro level ..............
Indian HHs not taking health insurance policy to mitigate huge OOPs?
Are the existing insured HHs satisfied ? Why are few HHs discontinuing their policies ?
Health insurance has not yet achieved the desired levels of penetration?
But then, ……………Why?
Present study makes a humble attempt to
find answers to these question through a household survey
Insured households in AP only 0.62 %
( National Average 1.2%)AP Health Index Rank - 20th with 0.46 score (National 0.54)
Average annual HH income Rs 45,372
Annual health expenses - Rs 19,566 (43% of HH income) 9 % households surveyed faced major sickness, with average expenditure being Rs 16,463
Relevance of study
Examine perception of HHs towards Health Insurance
Study factors influencing health insurance purchase decisions
Identify coverage needs, reasons for discontinuation or unwillingness to purchase health insurance
Help insurers tap potential market
Objectives of the Study
Policyholders’ Perceptions on Health Insurance
JAYALAKSHMI 19
Household Survey – primary data
Questionnaire Twin cities of Hyderabad & Secunderabad
221 Households
Methodology, Sample Source& Size
Socio-economic and
demographic profiles
Health Care Facilities and
Preferences
Insurance awareness and
Coverage
Data pertaining to….
Willingness to Purchase Health
Insurance
Factors influencing Health
Insurance purchase decision
Data pertaining to….
Analysis of
Household Survey
Socio-economic &
Demographic Profiles of
Households
39%
32%
19% 6% 4%
Age Profile 0-35 yrs 36-45yrs
46-55 yrs 56-65 yrs
66-70 yrs
70 percent of respondent were between 35 years to 45 years
Gender & Marital Profiles
66%
34%
Gender Profile
Male Female
60%
40%
Marital Status Male Female
14%
33%39%
11%3%
Educational Background
Professional
Postgraduate
Graduate
High School
Illiterate
Around 86 percent of Households were educated
Family Profiles / Insurance
Joint Nuclear
41%
59%
Insured Uninsured
57%
43%
56%
44%
Nuclear Joint
11%
4%
50%
2%
4%
8%
13%
3%5%
Occupational Profile
Governement
Public sector
Private sector
University
Autonomous Body
Self Employed
Quasi Governemnt
Unemployed
others
Occupational Profiles/ Insurance
Govern
emen
t
Public s
ecto
r
Privat
e se
ctor
Univer
sity
Autonom
ous Body
Self E
mplo
yed
Quasi G
overn
emnt
Unemplo
yed
other
s
11%4%
49%
2% 4% 8%13%
3% 5%
67%67%
60%
40%
11%
58%45%
83%
42%
33% 33%40%
60%
89%
42%55%
17%
58%
Respondents Insured Uninsured
Uptp Rs. 1 lakh
Rs. 1 lakh - Below
Rs. 2 lakh
Rs. 2 lakh - Below
Rs. 3 lakh
Rs. 3 lakh - Below
Rs. 4 lakh
Rs. 4lakh - Below
Rs. 5 lakh
Rs. 5lakh and
above
30% 31%
16%
11%
6% 6%
Income Range
Uptp Rs. 1 lakh
Rs. 1 lakh - Below
Rs. 2 lakh
Rs. 2 lakh - Below
Rs. 3 lakh
Rs. 3 lakh - Below
Rs. 4 lakh
Rs. 4lakh - Below Rs.
5 lakh
Rs. 5lakh and above
30% 31%
16% 11% 6% 6%
68% 62%
37% 46%50%
43%
32% 38%
63% 54%50%
57%
Income Range / In-surance
Uninsured Insured Respondents
28%
20%8%
21%
7% 10% 4%
Assets HoldingsHouse Bank Deposits SharesVehicles Agri lands House siteothers
Health care Provisioning and preference
72%
11%
8%
9%
Health Facilities
Within 2 km 2-Below 3 km3- Below 5 km 5 kms and more
12%
38%35%
15%
Types of HC facilities
PHC Private clinicsPrivate Hospitals Govt. Hospitals
Satisfaction with the quality of care
65%
35%
Yes No
Quality of Care
10%
60%
28%
2%
Excellent Good Average Poor
Healthcare Expenditure Experience
of Households
Hospitalization/ Acute / Chronic Diseases
42%
55%
45%
58%
57%
43%
0%
20%
40%
60%
80%
100%
Yes No
Hospitalised Households/ Insurance
Uninsured
Insured
Hospitalised
25%
66%
34%
18%
59%
41%
0%
20%
40%
60%
80%
100%
Acute Chronic
Nature of Illness / Insureance
Uninsured
Insured
Respondents
Duration/ Reasons for Hospitalization
Reasons for Hospitalization
14%
10%
34%19%
18%5%
Accident Unknown Fever Sickness Surgery Chronic Problem Disability
Duration of hospitalization
26%
25%28%
21%
Less than 5 days 5 days to less than 10 days 10 days to less than 15 days 15 days or more
Range / Impact of Medical Expenses
33%
32%
10%
11%
14%
Below Rs. 10000
Rs. 10000 - Below Rs.25000
Rs. 25000 - Below Rs.50000
Rs. 50000 - Below Rs.75000
Rs. 75000 and above
Range of Medicalcare Expenses Series1
Impact of Medical Expenditure
58%24%
18%
Heavy Financial Burden Moderately burdensome No financial Burdfen
Sources of Finance for Hospitalisation Expenditure
21%
34%
6%28%
40%
4% 5%Insurance
Past Savings
Sale of assets
Borrowings
Current Income
Employer Financed
other
Treatment Preference/ Satisfaction
Type of Medication
About 65% of Households preferred Allopathic treatments
Homeopathy
Ayurvedic
Satisfacton from Quality of Care
63%
37%
Yes No
OP Experience of Households ………….
Households with OP Expenditure
59%
41%
yes No
Preference for OP Treatment
11%
18%
14%2%
55%
Government Corporate Trust Employer Private Clinic
Causes for OP Treatment
20%
24%56%
Disease Injury Others
86%
13%
1%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Below Rs. 10000
Rs. 10000 - BelowRs.25000
Rs. 25000 - BelowRs.50000
Range for OP costs
Series1
Sources of Finance for OP & IP Care
Sources of Finance for Hospitalisation Expenditure
21%
34%
6%28%
40%
4% 5%
Insurance Past Savings Sale of assets Borrowings Current Income Employer Financed other
Current income being major source Drain of liquid income Huge OOP spending …………….. Potential market
Sources of Finance for OP Expenditure
18%
9%
4%
19%
44%
3% 3%
Insurance Past Savings Sale of assets Borrow ings
Current Income Employer Financed other
Insurance AwarenessOf
Households
Awareness / Sources of Information
Insurance awareness
73%
27%
Yes No
Types of Insurance
85%
73%
75%
8%
Life Insurance Health Insurance Motor Insurance others
Life insurance awareness significant Agent’s role very prominently seen
Sources of Information
49%
37%
18%
16%
13%9%
Agents
Friends
Colleagues
Neighbours
Relatives
Others
Media Sources
49%
40%
29%
13%11% 6%
Newspaper
Agents
Television
Magazines
Radio
others
Perception on Health insurance ………….
Necessity of Insurance
92%
8%
Yes No
Insured Households
56%
44%
Yes No
Although Health insurance is perceived as necessary by majority
Almost half of HHs Uninsured !!! Understanding and evaluating reasons important Family Floater policies significant
Health Insurance Claims Experience
68%
52%
32%
0%
20%
40%
60%
80%
100%
120%
Yes No
Claims Made Claims Paid Claims Experience with Insurer
Very Good Good
Unpaid claims significant Delays in claims settlement to be efficiently reduced Result in disinterest to continue or unwillingness in puchase
Duration for Claims Settlement
7% 6%
87%
1 Week 2 Weeks 1 Month
Continuation of Policy
25%
75%
Yes No
Reasons for rejections Reasons for Rejection
69%
25%
6%
Partly rejected
False claims
Exclusions
Interested in Continuation
25%
75%
Yes
No
Reasons for Discontinuation
29%
58%
13% Not Satisf ied w ith service ofinsurers
No Claim
Limited Coverage
Part rejections, discouraging factor No Claim reflects lack of understanding of insurance fundamentals Insurers’ quality tested through claims settlement………………
Policy Coverage desired Happy with Existing Coverage
68%
32%
Yes No
Additional Coverage Desired
42%
35%
29%28%
26%
22%
20%18%
LTC Out-Patient Drugs Pre-existing Chronic Pregnancy Consultation Disability
Reasons for taking insurance
39%
35%
17%
10%
12%6%
Realised need
Reduce burden
Avoid anxiety
Save income
Avoid debt
Tax benefit
Perception shift in purchase and continuation observed Coverage desired if integrated will reduce Out-of- pocket spending
Preference of Households Willing to Buy New Policies
Company
21%
59%
20%
Private Companies Public Companies Health insurance Companies
Premium Range
18%
25%
33%
11%
13%
Below Rs.1000 Rs.1000-2000 Rs.2000-3000 Rs.3000-4000 Rs.4000 - 5000Policy Term Preference
11%
54%
35%
1 year 2 years 3 years
Low Cost policies for a longer term more than one year from Public Companies seem to be the choice of majority HH willing
Households un-willingness to buy HI
Unwilling to take policy
12%12%
13%
21%
14%17%16%
22%
13%12%
Prior Coverage
Do not like any scheme
Expensive
Financial Constaints
Limited coverage
No product choice
Unsuitable
No past record of illness
No premium refund
no awareness
Financial constraints hindering element Low-cost policies to be concentrated on No past history of illness reflects ignorance about insurance
Summary and Conclusion
Health insurance a necessity in present times Lower income households face the brunt of
the escalating costs severely Huge out of pocket spending resulted in
indebtedness and erosion of assets Lower aged people and people from lower
income strata had more awareness and willingness for health insurance policies
Need of the hour………
Design low cost need based policies Focus on “Customer satisfaction” Improve quality of service of insurer Ensure good quality of care at the network hospitals Increase awareness for need for HI Convert unwilling customers through good counseling Tap huge potential market by changing MINDSET towards “ No premium
refund, no prior illness history Promote Health insurance as a RISK management tool Agency channel most popular and hence emphasize on professionalism
Insurers to focus on health insurance as distinct from other insurance
Ensure that large part of the population should not get left behind
Efficiency and equity must be adhered too
Those willing and able, those unwilling but able and those willing and unable to be given all the attention
Last Thought …………
“One of the greatest investments which we can make is to invest in health, for there is no other
investment like it.
Health is Life Insurance, success and … happiness insurance”
... Mahatma Gandhi
55JAYALAKSHMI
JAYALAKSHMI 56
THANK YOU