TriZetto: A Big Tech User in Healthcare Insurance

India has come a long way since the liberalization of the insurance industry in early 2000. The Insurance Regulatory and Development Authority (IRDA) has slowly but surely transformed the healthcare insurance industry in India. Yet the Indian healthcare industry is still plagued by several challenges:

• The partial opening of the insurance sectorForeign Direct Investment (FDI) upto 26% and high capital requirements of $25 mnhas inhibited the growth of healthcare insurance. However there is a bill to further reform the industry that has already been approved by Rajya Sabha and is likely to be introduced in Lok Sabha during the current budget session.
• The provider industry is fragmented with small clinics run by individual doctors to not-for-profit and corporate hospitals along with the vast unorganized sector. There is currently no incentive to implement technology and lack of standardization is a big issue.
• The policy holders are small in number. Less than 3% of the population is commercially insured. Because of the minimal number of policy holders, out of pocket expenses still constitute 64% of healthcare expenditures in India compared to just 18% worldwide.
• The introduction of the Third Party Administrator (TPA) has been a favorable step forward by the IRDA to provide an objective and neutral platform to connect the various stakeholders and bring transparency and efficiency to the industry. The TPA will focus on investing in infrastructure and technology. So the payers and providers can focus on their respective core competencyunderwriting risk and providing care.

The technology will make the biggest difference in sustaining and managing the 35% annualized growth that the healthcare insurance industry is currently experiencing. As reforms continue, and specialized standalone healthcare insurance companies come up with new products, underwriting, distribution and risk management strategies, this growth will only accelerate. The IRDA in India has a historical opportunity to ensure that reform is well planned, well regulated and well managed with technology as the centerpiece for stakeholders.

US healthcare has faced similar challenges from which India can learn. In fact the healthcare industry has grown to nearly 15% of the US GDP driven by muddled regulations and uneven technological adoption. There are thousands of different platforms currently deployed by US payers, providers, TPAs, PPOs, and other entities that serve the industry. All these systems work independently and create significant inefficiencies in the market. Many players have started to pursue the much elusive real-time payer-provider connectivity. The goal is to deliver an integrated end-to-end, real-time eligibility checking, claims processing and payment processing. The payer-provider connectivity will drive enhanced workflow processes and significantly reduce costs.

Connecting the payers, providers and policyholders in a real-time environment on a common or interconnected platform has the potential to significantly reduce cost, eliminate waste, and improve efficiency resulting in lower cost of care. India has the potential to leapfrog and set up a platform with standardization across the board for data exchange. The IRDA has already taken a lead on this, and constituted several committees to explore and recommend ways to enhance technology and introduce standardization. The challenge will be to bring all the stakeholders together and enforce stringent regulations that will drive towards common goals. Will we get there?

-Brij Sharma
The author is the senior
vice president for BPO services at TriZetto
maildqindia@cybermedia.co.in