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| Rahul Phadnis |
India’s healthcare industry is now at par with that of other emerging economies on account of its fast paced growth. This can be further enhanced by the Government’s initiative for collaboration between various health insurance companies making way for a consolidated data warehouse or a health information repository. This repository will also help in limiting the prevailing fraudulent practices. The advent of UID has now added benefits to this industry, and tapping into such a knowledge bank can mean the difference between a steep climb or fall in business for health insurance providers. The repository can also provide the Indian Health Ministry with a basis to combat epidemics proactively.
Growing healthcare sector in India
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| Sources: 1. Insurance industry: key trends and perspectives, Ernst & Young, 2009 2. Ernst & Young analysis |
Healthcare is one of India’s largest sectors in terms of revenue and employment, and the sector is expanding rapidly. Currently, the Indian healthcare market is estimated to be around $34.2 billion, and is expected to grow at a rate of around 23 per cent per annum. With government initiatives like National Rural Health Mission (NRHM), the healthcare expenditure is targeted to rise from 0.9 per cent of GDP to two to three per cent of GDP by 2012. With a registered annual growth of 9.3 per cent between 2000 and 2009, India’s healthcare is now comparable to the growth rate in other emerging economies such as China, Brazil and Mexico.
One factor propelling the growth of healthcare sector is the country’s booming population, with the current figure at around 1.1 billion and increasing at a two per cent annually. By 2050, the population is projected to reach 1.6 billion.
The current market for private health insurance schemes, which was initially dominated by the public sector is expanding. Even with the private sector currently holding more than 70 per cent of the healthcare, the increasing number of both public and private healthcare facilities is expected to propel demand for the industry.
What is health insurance?
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| Mandar Nayak |
Health insurance is a coverage that is provided by the insurance companies for medical care services to individuals or group of individuals. The individual or groups of individuals need to pay a premium in order to avail a health insurance policy. With a health insurance policy, people reduce their risk of incurring medical expenses in the event of illness that are covered in the policy. Some of the challenges for health insurance providers are:
Consolidated data store – The single most challenging hurdle for health insurance companies in India is to tap into a consolidated data store, having information pertaining patients, hospitals, medical service providers and other related elements such as clinical and operational indicators. With wide spread implications, such a store may end up being a make-it or break-it factor for new health insurance companies. Even with numerous benefits, insurance companies have had limited success with their attempts to build such an information source. For one, identifying individuals uniquely has been a trying job. Further, privacy laws in India are yet to progress to a level which enables easy sharing of patient’s data between insurance companies and hospitals. Hence the problem lies in information not being shared between the insurance companies.
Low penetration and untapped market – With more than 800 million of the total population falling in the low income group, a majority of people are either not at all covered or insufficiently covered. Seventy five per cent of expenditure on healthcare in India is still being met by ‘out-of-pocket’ consumers. Over 40 per cent of the low and middle income population borrow money or sell assets to pay for hospitalisation. These numbers deem that health insurance in India is limited only to the high and middle class segments of the population. Fewer health insurance plans are actually targeted for the poor and these cannot match the needs of all the diverse communities and their priorities. Such a gap between the need and fulfillment means lesser number of the low income groups actually opt for health insurance. Adding to the limitations is the fact that the plans do not cover expensive treatments or impose limits on covered illnesses.
High claim ratios – One of the other challenges that health insurance companies in India face is high claims ratio, and one of the reasons for this is bad pricing. The handshake between medical service providers and insurance companies does not happen due to which the medical history is not available with the insurance companies, leading to incorrect premium being levied on the customer.
| Key players in the health insurance sector | |
| Medical Service Providers Would include hospitals, medical care centers, doctors, dispensaries, nursing homes, diagnostic centres and pathology labs. | Health insurance Companies A company which provides insurance to an individual against risk due to ill health. |
| Customer | |
| Third Party Administrators The TPAs provide support services to the policy holder on policy related issues and claim settlements.The insurance provider outsource their administrative tasks like issuing identity cards, processing claims, making payments etc, to third party adninistrators. |
Insurance Regulatory Board The Insurance Regulatory and Development Authority (IRDA) is the statutory body responsible for business in India. They have the authority to grant licenses to private companies. |
Unique Identification Number (The Aadhaar Project) – A step ahead
Unique identification number is a string/ number which identifies an individual in India uniquely. The current population of India is around 1.2 billion and each Indian national will be eligible to have a unique identification number. The Unique Identification Authority of India (UIDAI), lead by Chairman Nandan Nilekani, has been set up to do this job of issuing unique numbers. The UID number will be issued only to those residents who satisfy the verification procedure.
This unique identification number will be associated with the name, sex, address, marital status, identification mark and finger biometrics for every person residing in India.
UIDAI’s job is only to issue a number and this number will be reflected on a card which will be issued by the registrar.
Registrars will be either the state governments or some of the central government agencies. Biometrics system will be used to ensure that a unique number is assigned to the individuals.
A colossal repository called Central ID Data Repository (CIDR) will be built from the data collected by the authority. The data collected would have information on the name of the individual, date of birth, sex, and biometric details.
Implementation of UID has added advantages for the health insurance system, ranging from tracking individuals to countering unforeseen epidemics.
| Overcoming the challenges in health insurance | |
| Challenge | Conquered by |
| Consolidated Data Store | Collaboration between insurance companies and other stakeholders of the healthcare industry will result into a single intelligent data store. |
| Low penetration and Untapped market | With UID repository fused into the health information collaborative model, tailor made reports and trend analysis can be obtained and the analysis will help in tapping different segments of the market. |
| High claim ratio | Reports from Health Information Repository and CIDR can showcase historical trends that can prove to be an important factor in underwriting and actuarial sciences for calculating appropriate premiums. |
A health insurance collaborative model
The health information collaborative model can be built on the lines of CIBIL, an information bureau which helps banks, financial institutions and other financiers to share credit histories of retail and commercial customers.
Healthcare data is more sensitive and significant than data from some of the other sectors. A health information repository can be implemented in the form of a data warehouse and would target at providing the insurance provider with a simple view of its historical data.
Health information repository will be controlled by a regulatory body like Health Information Regulatory Board (HIRB). Data feeds to the HIRB will be in an encrypted format to ensure data security. HIRB will solely exist to regulate the sharing of information between healthcare stakeholders. Hence, HIRB may share reports with insurance companies at its own discretion based on the information requested. On a broader level HIRB may capture cumulative data for appropriate ailments from insurance companies and medical service providers. Additionally, HIRB along with the health ministry, may mandate sharing of medical information for critical or high risk illnesses (like cancer, AIDS, swine flu etc.) defined by the board. Insurance companies/ medical service providers will need to share all the details for such illnesses at regular intervals with HIRB. Based on its guidelines, HIRB may provide aggregated data and critical illness data to health insurance companies.
The health insurance collaborative model illustrates the process of populating the repository from various sources namely; hospitals, insurance companies, third party administrators (TPAs )and providing reports like high value claims, coverage effectiveness, critical illness reports etc.
Using on-line analytical processing (OLAP) tools users can swiftly generate various types of reports and track various business parameters from different viewpoints.
Depending upon the business requirements and other factors or constraints, one can opt for any of the database technologies such as Teradata, Oracle, and Netezza etc.
A typical health insurance model could be as shown above. The major entities in such a model are as follows
- Health insurance firms
- Medical service providers like hospitals, doctors etc.
- Third party administrator (TPA)
- Health Information Regulatory Board (HIRB)
- CIDR or the UID Repository
- Patients
Solution Blueprint
The Source Data File Processor will act as an engine for all types of source file formats. Any file data not conforming to any of the predefined input file formats will be loaded to a separate region called the ‘Reject Area’. For the valid file formats, the processor engine will strip off the headers and move the data to the common staging area. Data profiler will be used to analyse data for completeness and accuracy. Profiling techniques will be used to evaluate missing fields and duplicate records which will be the first step towards improving the data quality. The ETL process is based on the data policies consisting of business rules and data validations. These policies are configurable, thereby rendering more flexibility to the transformation process. A master data repository is capable of providing a consistent and reliable way to access data. Comprehensive audit information for data load can be captured and reported in the system. Using a scheduler the entire system can be automated to run, based on source data file availability or during specific times.
Building a health information warehouse
The high level business architecture would consist of the four main components:
- Sources
- Transformation Engine
- Health Information Warehouse
- Analytics
Building such a warehouse would consist of steps like
Extraction: The data that needs to be extracted will be from the following sources:
- Heath insurance provider databases – These databases would consist of new memberships and claims. This data can be provided by the insurance companies to the health repository in an encrypted format.
- Hospitals – They need to have a database on the patients undergoing any surgical or medical procedures. This data may flow from the hospitals to the TPAs. The TPAs can then send this data in an encrypted format to the health repository.
Both health insurance companies and hospitals will need to share data in some common standard electronic format.
Transformation: The data that is extracted from the sources need to be transformed before they can be loaded in the staging areas. This will be required to get the data in a standard format (as per the data model) before consolidation. One can use any of the following approaches for transformations:
- ETL tools
- Operating system scripts and native database coding functionalities.
The business transformations which include data cleansing, data quality, and business policies will be based on inputs from HIRB and CIDR boards.
Loading: For loading the transformed data into the data warehouse tables, one can use the ETL tools or native database loading utilities.
Business intelligence application: This application will be used for analytics and will facilitate the need to generate and access customised reports over the data warehouse. Such an application can generate different types of reports such as:
- High value claims
- Diseases with high number of claims
- Coverage effectiveness
- New business premiums
- Policies sold
- Claims processed
- Average processing time
- Critical illness report for insurance companies
- Health ministry can take reports, based on HIRB and CIDR, which can enable government to determine steps to pro-actively promote wellness programmes in under privileged areas and high health risk population.
Depending on HIBRs guidelines, health insurance companies can request specific reports from HIBR which can be used for efficient underwriting.
Some of the sample reports that can be used by the health ministry may be in the format given in the tables below.
| Month | City | Age | Gender | Ailments | Number of cases | Month | City | Age | Gender | Accidents cases | Total expenses | |
| April-2010 | Pune | 55-60 | Male | Diabetes | 4012 | April-2010 | Mumbai | 15-35 | Male | 225 | 13,75,000.00 | |
| April-2010 | Pune | 55-60 | Female | Diabetes | 2378 | April-2010 | Mumbai | 15-35 | Female | 40 | 6,00,000.00 | |
| April-2010 | Mumbai | 55-60 | Male | Diabetes | 5249 | April-2010 | Pune | 15-35 | Male | 253 | 19,45,000.00 | |
| April-2010 | Mumbai | 55-60 | Female | Diabetes | 2544 | April-2010 | Pune | 15-35 | Female | 49 | 7,35,000.00 |
| UID | Name | Location | Age | Diagnosis description |
Admission/ Visit Date (YYYY-MM-DD) |
Insurance Status |
Claimed amount (in Rs) |
Remarks |
| INABFEZE9038 | Amit Sharma | Pune | 30 | AIDS | 2010-04-24 | Yes | Nil | |
| BSACSEB78292 | John D’souza | Panjim | 60 | Cancer | 2008-06-11 | Yes | 10,000 | |
| UYCBWEDO5290 | Irfan Hafiz | Ajmer | 52 | Swine Flu | 2010-12-20 | Yes | 4,000 |
Benefits of a collaborative model for health insurance
- Tracking an individual using UID is now easier as compared to other parameters that were used before.
- With reports from HIRB showing trends across various parameters such as age, gender, aliment, medical expenses etc; health insurance companies can now accomplish efficient underwriting.
- Availability of a consolidated data will guarantee access to statistical data which are critical for the DSS operations of a health insurance company. The company can now analyse the past and current trends of age groups, prevalent diseases etc, and create targeted products for specific groups.
- Creation of a data mart for detecting, investigating and evading health insurance frauds.
- Efficient tracking of health conditions. e.g. detecting trends of prevalent diseases, raising alerts in case of epidemics and health reports based on various geographical areas.
- People in low income groups and below poverty line can now be targeted with tailored programmes and effective coverage.
| Reporting Peroid (YYYY-MM) |
Location | Age group | Ailments | Number of Cases |
| 2010-04 | Nashik | 1-10 | Swine Flu | 3562 |
| 2010-04 | Nanded | 21-30 | Swine Flu | 1035 |
| 2010-04 | Nagpur | 31-45 | Swine Flu | 2504 |
Conclusion
The significant stake holders of the healthcare sector can be brought together by the Health Information Regulatory Board (HIRB), which is one of the most critical components of the collaborative model. A health insurance repository, comprising of data for all patients and policy holders, can be built based on the collaboration between the health insurance companies, medical service providers and third party administrators. This will help overcome some of the hurdles currently prevailing in the Indian health insurance industry.
The UID can then keep track of the patients undergoing treatment in medical centers irrespective of whether the person is a policy holder or not. The other advantage of UID is that it will provide a new set of probable customers, more from rural areas and people below poverty line. These failures can be reduced substantially with the introduction of UID, and through health insurance companies that can create tailor made schemes for these groups.
The health insurance repository will also provide an added advantage to proactively tackle the situation in case of epidemics.
References:
- UID and Public Health, http://uidai.gov.in
- Healthcare in India, Emerging market report 2007, rice waterhouse Coopers.
- Health Insurance in India, K. Sujatha Rao, National Commission on Macroeconomics and Health, Govt. of India.
About the authors
* Rahul Phadnis is a Technology Architect with Infosys Technologies.
* Mandar Nayak is a Technology Lead with Infosys Technologies.
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