By Varun Gera
Are you aware that 60 to 80 per cent of Indians’ healthcare spending is towards pharmaceutical bills, medicines, and regular healthcare, not towards hospitalisation Consider how many times you or your family members get hospitalised in a year. Most years go without any hospitalisation for an average Indian.
On the contrary, an average Indian family incurs far more pharmaceutical expenditure in a year. India has one of the highest and most burdensome out-of-pocket expenditures, contributing directly to the high incidence of catastrophic expenditures. Many may even be incurring medical expenses each month that get paid for straight from the pocket. The cost of hospitalisation in states like Maharashtra and Gujarat is more than in states like Kerala, yet Kerala’s medical expenditure is 30 per cent higher than in these states.
Wouldn’t it be nice if your out-of-pocket healthcare expenses could be taken care of by your insurance? India is now on the brink of making OPD a part of mainstream health insurance policies. OPD in health insurance would help patients steer clear of exorbitant outpatient expenses and ensure robust financial protection for healthcare, boosting health infrastructure and health consciousness, and optimising expenditure.
The inclusion of OPD in insurance has a significant impact on preventive health, helping improve the overall health quotient of a country, and aiding to build the primary healthcare infrastructure. Typically, whenever there are new products or technologies, corporates and employees become early adopters. Cashless OPD would help in easy access to primary healthcare as well as providing financial benefits for employers and employees.
The inflation in medical expenses currently stands at 15 per cent while general inflation stands at 6-7 per cent. This means that the cost of medical expenditure is slated to get higher while our income grows at half the pace. Therefore, the need for OPD cover in our health insurance scheme is the need of the hour since that is where our major and most burdensome expenses lie. The only other way to circumvent the burgeoning healthcare costs is through government intervention.
What exactly is OPD cover?
OPD cover is Out Patient Department Cover, which means coverage for expenses such as doctor’s consultation fees, pharmaceutical bills, dental treatments, health check-ups, and diagnostic tests. Even though these expenses seem small when compared to hospitalisation, they add up to huge amounts over time. Health insurance with OPD assures extra financial protection; however, OPD health insurers may have sub-limits to the sum insured towards expenses. An OPD insurance protects you from seemingly small, yet exorbitant expenses.
Our modern-day sedentary lifestyle comes with a range of chronic illnesses, making a significant dent in the budget. An OPD insurance plan ensures that daily medical expenses are covered without considerable financial burdens. The lack of organised healthcare records also necessitates OPD coverage to become the norm. It allows policyholders to avail the best outpatient treatment without getting subjected to hassles due to operational flaws.
Benefits of Cashless OPD Provision for outpatient expenses
To minimise out-of-pocket medical expenses, many organisations are providing their employees comprehensive OPD coverage plans that insure against doctor consultations, laboratory tests, hospitalisation expenses, health check-ups and medicines, among others. Given the wide coverage of OPD schemes, employees can reap the benefit of lowered out-of-pocket expenses, which are not under the purview of most insurance and Mediclaim policies.
Lucrative tax benefits
In providing insurance cover for cashless OPD, companies can also help employees claim tax benefits. When seen compared to other health policies, plans with OPD cover are eligible for exemption under sections 80D on the entire amount of the paid premium. As a result, employees, who spend huge amounts of money on pharmaceutical bills, or chronic patients can lower their expenses on healthcare with OPD cover.
Multiple claims benefit
In recent times, as health inflation has risen many are avoiding haste in visiting OPD centres. However, employees with cashless OPD cover and their family members can avail of multiple claims during the policy period upon every visit to the doctor, diagnostic centre or pharmacy. Due to their inclusive coverage, cashless OPD policies cover many kinds of transactions, which ultimately helps lessen the financial burden and medical inflation.
Simplified chronic disease management
Many Indians suffer from chronic health conditions like heart problems, hypertension, asthma, cholesterol and diabetes. Managing chronic diseases often increases the cost of living due to spending on check-ups, medicines and routine tests. According to IRDAI[4], 40 per cent of total health claims are processed as reimbursements, which are time-consuming and expensive. With cashless OPD cover, employees can get access to specialist doctors, diagnostic labs, pharmacies and cashless hospitalisation, reducing their financial burden and simplifying chronic disease management.
Opportunity to safeguard savings
There is no doubt that medical inflation is rising in India. Employees end up paying out of their pockets and then waiting for reimbursements. The COVID-19 pandemic showed us that many employees bore extreme financial burdens with a lack of insurance coverage. Many families lost their entire life savings and took expensive loans to meet rising health challenges. Cashless OPD can help employees protect their savings and make the most of health benefits.
After COVID-19, corporate India is now more aware of how crucial health insurance is. The emphasis has shifted to regular health check-ups, pharmacy benefits, and so on so that employees maintain good health.
About only 10-12 per cent of Indians have private health insurance policies. OPD expenses account for 62 per cent of total healthcare costs annually, but regular policies cover only hospitalisation. Top-up policies for OPD cover give some respite but are not enough to cover daily out-of-pocket medical expenses. With the Covid threat still upon us, costs for OPD visits are expected to rise further.
With growing uncertainty as shown by the pandemic, employers now know that health insurance does not end with having covered just for expenses of hospitalisation. From being a side focus, OPD services have now started getting more prominence.
With the need for primary healthcare coverage and a system that can provide health cover right from the beginning, even before hospitalisation, OPD services have now started gaining more limelight when compared to in-patient expenses.
Cashless OPD is also driving increased adoption of digital platforms, where users can easily discover network providers, book appointments for OPD, health tests, scans etc., and view prescriptions and reports all on a single app or web page. All records in one place give the longitudinal data points of users across a larger timeframe, which yields better insights into the health profile of the users. This unlocks the benefits of managed care, which is proven to reduce overall out-of-pocket expenses of users over a period of time.
Varun Gera, Founder & CEO, HealthAssure
(DISCLAIMER: The views expressed are sole of the author and ETHealthworld does not necessarily subscribe to it. ETHealthworld.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.)