Health insurance in India: need for managed care expertise

Health insurers in India currently face many challenges, including poor consumer awareness, strict regulations, and inefficient business practices. They operate under a combination of stifling administrative costs and high medical expense ratios which have ensured that insurers operate under steep losses. External factors (eg, onerous regulations, lack of standards, high claims payouts) and internal factors (eg, high administrative costs, dependence on indemnity models that cover inpatient treatment costs only) have forced the health insurance industry into a regressive spiral. To overcome these challenges, health insurers need to innovate in their product offerings and tighten their existing processes and cost structures. But as a long-term strategy, it is imperative that health insurers deploy managed care concepts, which will go a long way toward addressing the systemic issues in the current operational models of health plans.