Times of India
13 April 2010

Invest time in identifying a healthcare facility that’s economical and focused on quality before going for medical care, advise Preeti Kulkarni and Vidyalaxmi
OVER the past few years, India has emerged as a sought–after destination for people in the developed countries seeking quality healthcare at a significantly lower cost. While the growing number of medical tourists flocking to India reflects the reliability and cost–effectiveness of its healthcare sector, those within the country seldom invest the time and effort to identify the alternatives that can be economical, without compromising on the quality of the medical advice or treatment.

“In case of renowned doctors, it is quite likely the same doctor offers his or her services at a reputed hospital as well as at the next best hospital. The treatment and medication will be the same, but the cost will be higher in case of the former, thanks to its brand image,” says Pawan Bhalla, CEO, Raksha TPA. In fact, some third–party administrators (TPAs) say they have started recommending patients to choose a hospital chain’s unit say in Gurgaon, over its facility in New Delhi, as the rates could be lower by at least 10–20%. The table provides a comparison of average cost of certain commonly–sought treatments in the metropolitan and tier–II cities.

In India, the policyholder has the option of going for the hospital of his or her choice (except in case of cashless mediclaim facility, where the hospital is required to be listed with the insurer and the TPA). Hence, those seeking treatment, particularly planned surgeries, can consider doing a thorough research to decide on the ideal healthcare facility. While those with a health cover in place may not feel the need to walk the extra mile, it is important to remember that more health insurance policies are likely to come with the co–payment clause going forward, making such a detailed analysis inevitable.

Who should explore the option?
The cost–wise analysis is especially important in case of health policies that feature the co–payment clause, which requires the insured to contribute a certain percentage of the cost incurred on treatment. Even in case of policies that do not include such a clause, a smaller claim would mean that you would have a higher portion of sum insured remaining for the rest of the year.

“Choosing the healthcare facility wisely would help them make the most of the limited sum insured. They could zero in on a hospital that offers healthcare of comparable quality at a reasonable rate,” says the health insurance head of a leading private health insurer. This apart, filing a claim with a lower amount would help you keep the subsequent year’s renewal premium under check, as the previous year’s claim plays a role in determining the subsequent premium rate.

Be watchful of the challenges
While this route does seem like a win–win situation for the three parties involved – the policyholder, the insurer as well as the TPA – it’s not without its share of hurdles. “Unlike developed economies like the US, hospitals are not rated in India. Hence, a customer sitting in Delhi is unable to compare the cost differentials of a four–star–rated hospital in Delhi vis–à–vis a four–star–rated hospital in Aurangabad. He has to depend on sources such as relatives, friends or family doctor to make such decisions,” says an insurance broker. One could also do the due diligence by comparing the approximate quote from the TPA with the likely cost of treatment. If the difference is significant, you could opt for a good hospital in a tier II town.

Also, you need to bear in mind that merely opting for a branch of a hospital chain in a smaller city may not necessarily help all the time. “Branded hospitals, which have branches across the country, would most probably follow a standardised tariff structure. Hence, that wouldn’t result in significant savings. Therefore, a patient should identify local hospitals that offer quality medical facilities in the tier II town. In the process, s/he could verify the credentials of the hospital as well as the medical staff. It’s also important to take a second opinion on such issues,” advises Meena Nair, assistant vice–president, India Insure Risk Management and Insurance Broking Services.