The brewing slugfest in Indian healthcare

The Association of Healthcare Providers (India), or AHPI, has advised its member hospitals in north India to stop settling claims made by Bajaj Allianz General Insurance in the cashless mode from 1 September.

- HOWINDIALIVES

If implemented, Bajaj Allianz policyAHPI, in its order earlier this month, said it was considering a similar action against Care Healthcare. The standoff underscores the persistent tension among the three key stakeholders in this space-hospitals, insurers and policyholders.

The immediate tussle here is between hospitals and health insurers. AHPI members want Bajaj Allianz to raise reimbursement rates for health procedures. They want Bajaj to pay the amounts they quote and not undercut them while settling claims. Bajaj Allianz, in its statement, fired from the shoulders of policyholders, battling for their right to receive quality healthcare at fair rates. Meanwhile, policyholders are caught between higher premiums from insurers and rising healthcare costs in hospitals.

In the last five years, top listed hospital chains have posted good revenue and profit growth, and higher margins. The covid pandemic marked the start of this period, boosting both private hospitals and health insurance.

In general, hospitals have grown faster than a small set of listed non-life insurers. This is also reflected in stock prices. In the past five years, healthcare stocks have beaten the market handsomely, even as non-life insurers have struggled to do so.