1. Insurance in Indian healthcare delivery
Shiva Belavadi for
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2. Indian Health market
• The Indian health industry has grown from 85500 cr. in 2000 to
Rs.180000 cr. in 2010
• Total Population Covered for Health: < 20%
Insurance Demographics - India
(count in
130 190 millions)
60
1100
Total Population
Covered under Insurance
Covered under other Financial Model
Net Covered Population
Confidential property of UnitedHealth Group. Do not distribute or reproduce without the express permission of UnitedHealth Group.

3. Health Insurance Market in India
• Annual Health Insurance Premium: 9000 cr.
• Majority covered under government or employer Schemes
• Commercial health insurance – 2% penetration
• 70% of healthcare expenses met by consumers
Annual Stats-Healthcare
(in INR Billions)
36%
120
•36% is spent on IPD
332 100% •64% is spent on OPD
212
64%
Healthcare Spend OPD Spend IPD Spend
Confidential property of UnitedHealth Group. Do not distribute or reproduce without the express permission of UnitedHealth Group.

4. Health Insurance Companies in
India
The Health Insurance sector in India is broadly classified into two-
1)Non Life Insurance Companies- 4 public sector companies and 20 private
sector companies
2)Life Insurance Companies- LIC is the market leader amongst 22 private
players.
•Specialized health insurance companies-Star Health & Allied Insurance
Apollo DKV Insurance
What Health Insurance companies do –
•Risk carriers
•Innovation of Insurance products
•Appoint a third part administrator (TPA) for claims processing
Confidential property of UnitedHealth Group. Do not distribute or reproduce without the express permission of UnitedHealth Group.

5. The Prelude
Description of Business:
• A Third Party Administration venture in India is a service business dedicated to
service health insurance policyholders on behalf of Insurance Companies.
• The operating plan envisages development of a National level provider network with
a view to provide "cashless treatment" facility at a reasonable cost.
• An outcome of the role is likely to raise the quality of healthcare delivery and to
become instruments of greater health insurance penetration.
Key Value Drivers for TPA Business in India
• Rate of Growth of Health Insurance Industry
• TPA fee structure
• Evolving Organization TPA Business Strategy
• Market share of TPA revenues
Confidential property of UnitedHealth Group. Do not distribute or reproduce without the express permission of UnitedHealth Group.

6. Structure of Health Insurance
Industry in India
Functions of TPA-
•Maintain database of policyholders
•Issue of identity card to all policyholders
•Provide information to policyholders
about hospitals
•Provide Cashless service
•Process claims
Confidential property of UnitedHealth Group. Do not distribute or reproduce without the express permission of UnitedHealth Group.

7. Issues
• Non-standardized treatment protocols and rates
• Lack of morbidity data at the local level
• Propensity for over utilization
• Lack of Co-ordination & support from the provider
• Low Insurance penetration
• Rising Health cost with average inflation at 13.2% P.A
• Rising Health premiums to contain the losses incurred by Insurance Cos.
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8. Way forward
• Future with Regulated Health market
• Corporates opting for Self- Funded Plans with rise in health premiums
• Continued Medical inflation- Demand supply gap
• Increase Insurance penetration considering rise in medical cost (Current YOY growth
@ 37%)
• Consumer driven health plans
• Developing Disease/ Care Management product market
Confidential property of UnitedHealth Group. Do not distribute or reproduce without the express permission of UnitedHealth Group.