State-run general insurance companies have roped in 449 hospitals across the four metropolitan cities of Delhi, Mumbai, Chennai and Bangalore for creating a preferred provider network (PPN) of hospitals.
This has been done to help the insurer to keep the ever increasing cost of healthcare in check while at the same time rationalising the health insurance portfolio to provide healthcare at an affordable cost, minister of state for finance Namo Narain Meena told the Lok Sabha on Friday.
At present, the PPN includes a network of 449 hospitals (Delhi-163, Mumbai-121, Chennai-84 and Bangalore-81) and more number of hospitals are joining the network, he said.
These hospitals provide cashless facility to the insured and package rates for 41 common surgical procedures at fixed rates.
These package rates would stabilise the hospitalisation cost and would benefit the insured by lowering the cost of every hospitalisation leaving a larger balance in the sum insured for future hospitalisation, the minister pointed out.
Over a time, insurance companies hope to achieve a more even geographical spread of the hospitals network in order to minimise inconvenience to the insured persons, he added.
In addition, the cashless facility is also available in non-PPN hospitals for emergency and trauma cases and the settlement of claim on reimbursement basis continues to be available for all hospitals in these cities. For the rest of the country, the earlier process of rendering cashless facility will continue, he said.
State-run general insurance companies have been incurring health insurance claims in excess of premium received and after factoring in acquisition costs, which are around 10 per cent, and the management expenses which are over 25 per cent, the combined ratio, ie, the total expenses for health portfolio exceed 140 per cent of the premium income, the minister added.