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How Managed Care helps Optimize Medical Spend

Prashant Jhaveri, Chief Business Office, Medi Assist
Thursday, January 19, 2017
Prashant Jhaveri, Chief Business Office, Medi Assist
Headquartered in Bengaluru, Medi Assist aims to deliver informed healthcare decisions to customers by technology, partnerships and human touch. The entity is influencing the ecosystem to cover many more lives that today remain unserved.

The concept of managed care, aimed at reducing cost of providing quality healthcare, is still in its nascent stage in India. A popular concept in the United States, the need for managed care organizations is perhaps far more acute among developing nations such as India. Medical inflation in India stands at 12-15 percent as against a global average of 6-7 percent. Despite the steep rise in cost of healthcare, the IRDA Annual Report 2014-2015 indicates that only two percent of the Indian population is covered by individual health insurance policies; and only another four percent are covered under group medical policies. In the absence of any medical cover, the average Indian family today grapples with high out-of-pocket expenses on account of healthcare.

A recent report by FICCI suggests that primary healthcare accounts for over 70 percent of all medical spend and that the per capita spend of urban households on outpatient care is approximately Rs. 4,250 per person, a typical urban family of four adults, therefore, spends an average of Rs. 17,000/- per month on doctor consults, medicines and diagnostic labs. Add to this the inherent lack of transparency within the healthcare ecosystem. While it is, for example, easy for one to compare myriad options, choose and book holidays, travel, stay and so on, consumers do not have such deep visibility into the options available to them when planning their medical spend. Managed Care Organizations (MCO), therefore, have a significant role to play in the Indian healthcare ecosystem. Not only do they bring all the stakeholders of the ecosystem together, they also work towards deploying techniques to promote informed decision making and reduce overall cost of care for consumers.

MCOs Negotiate Early

Managed care organizations partner with healthcare providers to obtain preferred tariffs and discounts for their members. While the preferred pricing helps increase visibility and footfalls for the provider, it helps reduce cost of care for the individual. MCOs also deploy various loss control measures to ensure that, in the event of a hospitalization, members are provided most optimal care at the most optimal price point at their chosen network medical centre.


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