[ 2014-10-28 ]

Private health insurers virtually unregulated
Private health insurers have been left to their
own devices due to weak regulation from the
industry regulator, the National Health Insurance
Authority (NHIA), says General Manager of
Nationwide Mutual Healthcare, Anthony Sowah.

Nationwide is the biggest of 22 licenced private
health insurance providers, which under law are to
be registered and supervised by the NHIA.

But the regulator’s focus, Mr. Sowah said, is on
the state-sponsored National Health Insurance
Scheme (NHIS, while little attention is being paid
to the activities of private insurers.

“We face challenges, yet regulation is weak in
this country. We are in an industry where
participants come and exit at will, yet it is an
industry where the service providers hold monies
in trust for members because premiums are paid in
advance, and are expected to pay for the
healthcare needs of members.

“And it isn’t just any need we are addressing,
but healthcare needs. So if such an important
industry is left unregulated, then it creates
problems,” he said in an interview with the
B&FT.

Due to the weak supervision, some players have
unhealthy market pricing policies that could
undermine the industry’s credibility.

Most players, he said, do not set their premiums
based on sound actuarial calculations but simply
to undercut the business of huge and
well-resourced providers -- creating risks not
just for their business but the whole industry and
its reputation.

“By virtue of being pioneers and leaders, we
have invested a lot into human resources, ICT
infrastructure and actuarial resources just to
help us with a good analysis of the industry and
to help with-decision-making.

“Most of the others have adopted a very simple
pricing method. They look at what Nationwide is
doing and then cut the price by 10 to 20percent.
So when you are about to close a business with a
client or renewing a business, the client will
then bring out the prices of our competitors and
then they are tempted. But we know the sound
actuarial basis of arriving at premiums, so it
becomes difficult for us to come down to the level
of those competitors,” he said.

Another kind of challenge comes from clinics and
hospitals which seek to profit from insured health
care by charging for services not rendered, or
choosing treatment that brings in the most revenue
from private insurers.

“For example, patients may come with simple
stress-related conditions which require rest or
lifestyle management, but doctors could load the
patients with drugs because the drugs are getting
to their expiry dates and the hospitals don’t
want to bear the losses.

“Some hospitals also blatantly attempt to
defraud. So services not rendered are billed
simply because an insurance company is paying for
the services,” he added.

He said to deal with this challenge, Nationwide
has a very strong internal vetting system that
starts from the moment claims are submitted and
ends with review by a vetting committee composed
of a team of doctors from different backgrounds.

The company also has a standing audit team that
visits and carries out clinical audits on- site.

“We may take a couple of claims, visit your
facility and demand the patient’s folder because
no doctor will lie in the folder. If you
‘over-service’ somebody and it is not in the
folder, then you want to defraud the health
insurance provider.”

Source - Bus & Fin Times

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