Role of Health Insurance in Indian Healthcare Industry

The progress that India has been observing in the recent years has a major share of the healthcare industry which has been playing an important role in its economic growth and development. There are several growth drivers influencing and impacting the growth of the healthcare industry, and thereby the nation, bringing in lots of potential and various avenues of growth. Moreover, with the increasing government intervention and private-public partnerships, the healthcare sector in India is poised for tremendous growth in the coming years.

In light of the present healthcare scenario in India, not only is the hospital sector becoming an emerging market, but also various aspects of healthcare services like medical diagnostics, pharmaceuticals, and health insurance are also expected to continue moving on the growth path in the time to come. Currently, the Indian healthcare sector is growing at a rate of 16.5 percent and is likely to reach $280 billion by the year 2020. The rapidly growing market represents a potential opportunity for the country, particularly in terms of employment as well as revenue.

However, the high costs of healthcare have resulted in greater out-of-the-pocket expenditure for people. As a result, it is high time that the government takes appropriate measures in reducing the out-of-the-pocket expenditure for medical treatment and services. Particularly, there is a dire need for a firm health insurance penetration in the country to cover the gargantuan population of the nation and increase the accessibility of quality healthcare services to people of all sociology-economic backgrounds.

The Significance of Health Insurance: 

In India, the cost of healthcare services is immensely high, and in the coming years, it is expected to be on a continuous rise, given the rapid privatization and high-value diagnostics and drugs.  The fact that government expenditure on healthcare and public health financing is adequate to meet the rising healthcare cost is increasing the financial burden for people in both urban and rural areas. In the light of the fiscal crisis, health insurance has been emerging as an alternative to healthcare financing. The demand for healthcare services and lack of accessibility to it, coupled with the escalating healthcare costs, has contributed to the penetration of health insurance into the healthcare market.

Rising Penetration of Health Insurance

Reports reveal that in India, out of the total healthcare spending, 62 percent is from individual out-of-the-pocket spending, whereas, globally, the individual spend is only 21 percent. (http://www.thehindu.com/business/out-of-pocket-spend-makes-up-62-of-health-care-costs/article21860682.ece) This high out-of-the-pocket expenditure in the country is mainly due to under-penetration of health insurance and low public spending by the government. However, in the recent years, the aggressive entry of private insurance players and the increasing awareness for health insurance coupled with rising income levels has paved way for increase in affordability of quality healthcare, which is subsequently driving the growth of the sector to meet the demand for expensive procedures and bringing in a greater heft for private hospitals.

The growing income levels, increasing individual spending, and the skyrocketing healthcare cost have paved way for the emergence of a number of private insurance companies in the market. Moreover, the liberalization of the healthcare sector in India along with the government regulations favoring health insurance, are expected to further drive the growth of insurance products.  Despite all such developments, the penetration of health insurance in India remains still lesser than other developed countries in the world. It is estimated that only 11 percent of the population is currently covered by health insurance.

With the existing lifestyle changes, emerging non-communicable diseases, and the expensive treatments posing finance burden on people, it is high time healthcare insurance be penetrated deeper among the masses. By generating awareness about insurance and marketing the right policies to the right audience, insurance companies can help people meet out their untoward health expenses arising due to unexpected illnesses. This increasing penetration of healthcare insurance products in India will benefit the people who are at risk, by giving them access to high-quality healthcare at private hospitals, which were previously inaccessible due to high costs.

With the healthcare becoming unbelievably expensive, health insurance has become a favorable alternative to the financial burden. It is important that the benefit of health insurance be extended to not only the income-generating middle class but also the excluded poor population. Public and private insurance companies along with government must expand their products and services across the nation to let people seek better quality healthcare. 

No doubt, the role of health insurance in Indian healthcare industry is tremendously improving and thereby contributing to the growth of the sector as well. As the industry progresses, the opportunities are vast and growing. With the changing technologies and emerging subsectors, embarking on a career into the burgeoning healthcare sector requires appropriate academic and industry knowledge, coupled with adequate skills and abilities. It is hence the extreme need of the healthcare industry today to have a workforce comprising of potential candidates who are trained and qualified to face the challenges and capable enough of further driving the growth of the healthcare industry.

In that sense, IIHMR (International Institute of Health Management Research) located in New Delhi, has been catering to the needs and demands of the healthcare sector by generating efficient professionals every single year. We provide executive training programs/courses that are structured with cutting-edge curriculum to impart technical as well as managerial skills/abilities in students. IIHMR has been a place of pride, ever since its inception, for its academic excellence, industry interface, as well as research & development in the healthcare domain. We understand that innovative methodologies of training can bridge the skills gap among professionals and mitigate the talent crunch existing in the healthcare sector of the country. We prepare and equip our students with high standards of education and training to transform them into potential candidates with high employability skills to avail better opportunities in specialized healthcare sectors and sub-sectors. IIHMR has been aiming to produce qualified and competent healthcare professionals, who are enabled and well-equipped to meet the growing demands of the healthcare industry.