DISRUPTING HEALTH INSURANCE

NARAYANA HEALTH'S INTEGRATED HEALTHCARE INSURANCE MODEL HAS STIRRED UP THE INDUSTRY. IS THIS THE WAY FORWARD FOR OTHERS TOO?

- B. S. SRINIVASALU REDDY

THE IDEA of a hospital-owned health insurance company is not new. The latest to join the bandwagon is Narayana Health (formerly Narayana Hrudayalaya), promoted by well-known cardiac surgeon Devi Prasad Shetty.

Shetty, who made heart surgeries affordable by adopting a new sourcing model for costly surgical equipment, has come up with an insurance plan, Aditi, targeted at the lower-middle class, for an annual premium of ₹10,000 (excluding GST). Aditi, launched under Narayana Health Insurance Ltd., offers a ₹1 crore comprehensive cover for surgeries and ₹5 lakh for medical management at Narayana Health network hospitals for a basic entry-level plan.

Initially limited to Narayana Health facilities for selective procedures, Aditi now allows emergency treatment at other hospitals as well. The insurance plan also covers treatment in general wards, which has been launched on a pilot basis in four districts around Mysore.

“Today, health insurance is exemplified by a ‘trust deficit’. The three main parties to the transaction —the insured, the payor (insurance company), and the provider (hospital) do not enjoy mutual trust. By creating an integrated care model the trust deficit is bridged,” says Shetty.

Industry insiders claim Aditi could disrupt the standalone models adopted by hospitals and their health insurance partners.

“Despite scale-related limitations, structuring insurance plans around a service provider’s specific network is innovative,” says Aniruddha Marathe, MD and partner, BCG. “This model will pave the way for others to look at it as an attractive opportunity.” The model is already a big success abroad, including the U.S. and Indonesia.