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Shifting consumer perceptions and consumption patterns of health insurance buyer

Shifting consumer perceptions and consumption patterns of health insurance buyer

Shifting consumer perceptions and consumption patterns of health insurance buyer
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By CNBCTV18.com Contributor Dec 23, 2020 4:00:08 PM IST (Updated)

India’s total healthcare spending in FY2019-20 was at 3.6 percent of GDP, as per OECD, out of which public health expenditure was just 1.29 percent of GDP.

Authored by Mayank Bathwal

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India’s total healthcare spending in FY2019-20 was at 3.6 percent of GDP, as per OECD, out of which public health expenditure was just 1.29 percent of GDP.
Over 65 percent of healthcare spends are paid by the consumer out of pocket, putting India at the highest end of the global spectrum. Consumers have always wanted the best quality healthcare for themselves, across all economic strata. Affording the best quality of healthcare is hence the primary and most important reason for people to have health insurance.
Traditionally, health insurance primarily covered mainly hospitalization expenses. The category thus responded to the situation once the event of sickness had already taken place. The whole focus was on ‘insurance’ first- which, thus made the category more like sickness insurance than health insurance.
Now for a beginning, this was a very relevant start since this is the healthcare cost that hurts customers the most given its potential severity. But over a period of time, this whole approach has led to an issue of relevance amongst a large category of customers.
With more than 65 percent of the Indian population below 35years, a large part of them feels that health insurance is not relevant for them, as they believe they won’t need it as they won’t fall seriously ill or need hospitalization in the next few years. Similarly, a large part of the population that suffers from lifestyle-related disease conditions like diabetes, asthma, BP problems etc do not end up getting adequate coverage.
So there was definitely a need to expand the scope of the coverage that the category provides. The outbreak of COVID 19 was a reminder for consumers about the importance of having health insurance. While there has been some growth in awareness, with stand-alone health insurance players quadrupling their size in the last five years, only 3 percent of the total Indian population is covered by individually paid retail health insurance.
In general, everyone in the country wants to be healthy and improve their health. However, not everyone is able to convert their intentions into action.
This is where the health insurance industry can play a larger role in the lives of their customers and turn themselves into more of a health insurance company than a sickness insurance company. I believe that by engaging with customers in this manner, we are creating a more lasting and meaningful relationship with them. Such engagements will eventually help a health insurance company to help customers manage their health and be relevant in their day-to-day lives and not just in situations of a health crisis. We can do that by having a much larger coverage range that includes primary care, preventive care, and promotive care, apart from just secondary and tertiary care which is where the traditional focus was.
Health insurance companies, therefore, need to play the role of a health partner in the lives of their customers. Helping them to stay healthy will make them more relevant. Now, even the regulatory framework supports incentivizing customers for staying healthy.
Similarly, since customers have a lot of challenges of lifestyle diseases and other conditions, health Insurance companies can help customers take care of such conditions. So, while funding of sickness conditions will continue to happen, we can also play a more proactive role by promoting and helping them maintain healthy behaviour.
While this will keep customers healthy, it will also be beneficial to health insurance companies. If claims go down, over a period of time, the premiums will also come down and thereby make the products more affordable for customers. Secondly, the level of engagement that insurance companies will have with their customer will be beyond just hospitalization funding, and more to do with customer’s day to day lives.
Everyone wants to be successful in their life, and health is a key aspect in that, where insurance companies can play a crucial role. The Government of India has also addressed that under the Ayushman Bharat scheme. Whilst there is the whole element of funding sickness insurance, there is also
the presence of 150,000 health and wellness centres that can provide primary and preventive care to citizens across the country. Even IRDA has now brought in very enabling wellness guidelines in insurance products. The ultimate objective is a Fit and a Healthy India and that’s where a health insurance company can play a role, as it will reduce illness, bring down disease burden, fund healthcare events, increase productivity, and ultimately result in the growth of the nation, and thus also contribute to the national movement towards a “Fit India”.
Mayank Bathwal is CEO at Aditya Birla Health Insurance. Views are personal
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