Healthcare Insurance Market

Chapter - 1

Definitions of Health insurance

Insurance providing for the payment of benefits as a result of sickness or injury. Includes various types of insurance, such as accident insurance, disability income replacement insurance, medical expense insurance, and accidental death and dismemberment ( Removal of limbs by cuttings) insurance .

Definitions of Health insurance

Health insurance like other forms of insurance is a form of collectivism by means of which people collectively pool their risk, in this case the risk of incurring medical expenses.

Healthcare Insurance
The main drivers in the healthcare market is the ageing population. There is no Universal Health Care insurance system adopted among the countries. Different Countries have tried different models according to their knowledge .

Health Insurance Policies

Health Insurance Policies Long-term policies- generally provided by life assurance companies

Income protection insurance Critical illness insurance Long-term care insurance

Health Insurance Policies

Health Insurance Policies
Short-term policies - General insurance companies Accident, sickness and unemployment insurance Private medical insurance Hospital cash plans

Healthcare Insurance Market

National Health Service (NHS)-1948 UK state system of healthcare. Higher proportion of healthcare than other economically advanced countries. For Healthcare Poor people depends on Charities, Religious organizations, self help or traditional health system.

Healthcare Insurance Market

National Health Service (NHS)-1948 Trade Unions, Friendly Societies, Selfhelp groups provided Insurance against medical risk. National Insurance Act-1911 Provide national insurance against range of risk of working people (Poor, Low paid workers).

Healthcare Insurance Market

NHS Act 1946, Came into effect in 1948.
CONCEPT OF NHS Hospitals were purchased by state. NHS employed hospital doctors, can practice privately. (GPs) General practioners contract with NHS - paid per patient.

Healthcare Insurance Market

Free health treatment. Services funded through general taxation.
NHS Today Estimated cost 67 billion pound with 1.3 million Employee. Free access to Hospitals, GPS, and Clinic treatment. Locally Managed primary care trust GPs.

Healthcare Insurance Market

Health And Ambulance Trusts. Privately run Treatment centre work With
NHS at fixed price in order to ease the burden of NHS. Private & overseas hospitals - helpful for patients who cant get treatment with in the time scale.

Healthcare Insurance Market

Difference Between Private & Public sector Differences exist due to type of treatment like emergency, Alternative medicines, Cosmetic Surgery. Private Sector - Treatment through Technique & Technology,

Healthcare Insurance Market

Certain Private Hospitals May not
have Intensive care back up technology. Choice of facilities, Private sector-Complete choice of specialist, Time spent-waiting to be treated (Waiting List.),

Healthcare Insurance Market

Participants of Health Care Insurance Market: Private Health Sector, Provident Insurers, Commercial insurers, Health and Dental Cash Plans,

Healthcare Insurance Market

Third Party Administrators and other
Providers.

Healthcare Insurance Market

Private Health Sector-People (Cant wait NHS Facility) / willing to pay directly or through Insurance. Highly Specialized market

Healthcare Insurance Market

Advan. of Private Medical Treatment Less time waiting Non urgent operations Like hernia. Choice of Consultant operations or Treatment, Choice of admission dates / hospitals. Private Room Facility.

Healthcare Insurance Market

Private Med. Ins. Policies dont cover: Chronic (Long lasting) Illness- asthma / Diabetes, Normal pregnancy, Childbirth, Long term Disability or long term psychiatric illness,

Healthcare Insurance Market

Cosmetic surgery / Therapies ( Some Policies
may offer). Provident Insurers (FSMA-2000) are : Non profit org. for the provision of Medical Treatment with No shareholders, Operating surpluses are part of their reserves & so no corporation tax.

Healthcare Insurance Market

No tax relief on Losses.
Commercial insurers are : Operating in healthcare insurance market, Profit making org. with shareholders, Pay dividends out of their taxed profit.

Healthcare Insurance Market

Health & Dental Cash Plans: Regional funds for working people, Mutual org. run for the benefits of their members, Most of the healthcare problems are related to Dental & optics.

Healthcare Insurance Market

Third party Administrators & Other Providers: Specialist health care Consultants, Provide advice to corporate clients on selecting Insurers and Cost containment services, Employers run for their Employees,

Healthcare Insurance Market

Provide a Full Claim administration services, Paying claim on the behalf of employers.
Strengths of TPAs and Consultancies : Independence - Like Brokers but not all, Motivation Rewarded for Cost Controlling, Flexibility Tailored solution according to Client Requirements

Healthcare Insurance Market

Information Retain all data of client
Healthcare insurance including Claims details.

Healthcare Trust & Self Insurance

Health Trust Set up by Large org. due to Cost and Administration. Features of a Health Trust Not like an Insurance policy, No tax applicable on the fund like IPT, Trust Administered by Trustee or a Trust

Healthcare Trust
Company, Health Trust is Funded by Employer, Trustees determines the Employees Benefits, Limited Membership of the Trust, Legal advice is necessary to setup a Trust because of the Complexity in Trust Law,

Healthcare Trust
Employees receive benefits
according to Trust Rules, Employers Labiality may be limited by arranging Stop Loss Insurance.

Self Insurance
Self Insurance Payment of Healthcare treatment cost without Insurance by Employer or Individuals. Why Self Insurance? Underestimation of Healthcare treatment cost ,

Self Insurance
Low cost event may add number of
treatment & so increase the amount required for treatment, Future treatments increase the Cost.

Taxation
Tax is not usually applied to the person who received the benefits of medical treatment. Value Added Tax (VAT) is not applied to Premium. Insurance Premium tax (IPT) is applied on Premium.

Distribution Channels
Categories of Medical Insurance Market Individual paid, Company paid and, Voluntary employee paid groups (Employees pay their premium).

Distribution Channels
Two Main Dist. Methods for Healthcare Insurance Direct sales (Including Telesales), Independent Intermediaries.

Distribution Channels
Direct sales Mobile Sales Consultants - Deals Large Employers, Send mail to potential customers about the product (Forms, Phone or Internet), Advertisement on Print & Electronic Media Websites-Provide information about health product,

Distribution Channels
Call Centres - Contact to potential Customers.
Advantages of Direct Sales: Control over Sales process with customers, Differentiation Better service, Feedback from customers about Product & Services.

Distribution Channels
Disadvantages of Direct Sales : Customers Limited Information Products available in the Health Insurance Market, Loss of Goodwill - Commission base selling.

Distribution Channels
Independent intermediaries A ready made, experienced, and trusted channel of distribution for the Healthcare Products to a large number of Individuals. Cost effective for the Insurer due to Advertisement expenses, Services & Sales infrastructure.