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Insuring progress in healthcare

Shobha Mishra Ghosh, Senior Director and Sidharth Sonawat, Sr Assistant Director at Federation of Indian Chambers of Commerce & Industry (FICCI) give an insight on promoting quality in healthcare through health insurance and elaborate on FICCI's role in doing so

Indian healthcare is characterised by a huge demand-supply gap. The demand is increasing due to higher disposable incomes in the hands of ever expanding middle-class and growing penetration of government-sponsored health insurance schemes (GSHIS). Overall health insurance penetration has risen to ~24 per cent of the population and growing at a fast rate fuelled by rapid enrolment under GSHIS. On the supply side, the government infrastructure growth has not kept pace with the demand, both quantitatively and qualitatively. Currently, healthcare needs in rural India are met either by government primary or community healthcare centre and small private healthcare facilities. For secondary or tertiary care, rural India has to travel to nearby towns and cities and spend out of pocket for the treatment. The private sector that provides 80 per cent of the healthcare in the country is concentrated in the urban centres. As the disposal incomes in the hand of people have increased and quality of public healthcare facilities is not upto mark, even the poor prefer to go to private healthcare facilities, which are a huge financial burden. This has presented an opportunity to private entrepreneurs to cater to this demand and a number of stand-alone hospitals and chains are coming up in smaller cities and towns. However, the aspect of quality still remains nebulous in government and private facilities alike.

The current perception is that promoting quality escalates the cost of care which is already unaffordable. However, anecdotal and select analytical evidence suggests that implementing quality practices reduces the cost of care delivery in the long run. Accreditation is a quality tool which ensures minimum quality standards of care delivery and is voluntary in nature worldwide. In India, National Accreditation Board for Hospitals and Healthcare Providers (NABH) is the Accreditation Body under Quality Council of India which has been set up in 2005 and has accredited so far only around 140 hospitals. The challenge is to create an awareness amongst the providers about the benefits of accreditation accruing to the health facilities, amongst insurers about the impact of accreditation on reduction of claim ratios and amongst consumers about the quality of care delivered owing to the accreditation.

Promoting continuous quality upgradation to achieve accreditation and beyond is a complex exercise which has to address multiple levels involving a number of stakeholders. International experience shows that payers can incentivise healthcare facilities to improve quality of care and data reporting on patient satisfaction through performance-based purchasing. Payers can encourage providers to measure and report quality-related data and improve quality processes through strategic purchasing and rewarding for excellence in quality. However, introducing such a practice would require, collection and analysis of quality data, establishing minimum threshold, incentives for continuous improvement to achieve accreditation and to keep upgrading beyond accreditation. This cycle has to reinforce itself through a continuous monitoring and evaluation exercise.

International experience of “Pay for Quality” ensures adoption of quality framework by providers which acts as the qualifying criterion for negotiation of rates from insurers. However, this would also require that the insurers have sufficient data to suggest that adoption of quality framework results in lowering the cost of claims. This mechanism can run parallel with the accreditation process where the hospitals can move through various levels- ’pre-assessment”, ‘pre-accreditation’, and ‘accreditation’ stages. A similar example is prevalent in Brazil. UNIMED, a private insurer in Belo Horizonte, Brazil, has linked reimbursement rates of networked hospitals to their achievement of accreditation levels of the National Accreditation Organization. The insurer increases the reimbursement by defined percentages according to the accreditation levels attained e.g. level 1 receives an additional seven per cent, level 2 gets nine per cent, and level 3 is paid an extra 15 per cent. (Source - Government-Sponsored Health Insurance in India: Are You Covered? - Gerard La Forgia and Somil Nagpal, World Bank).

In India, insurers find it challenging to use this principle due to lack of a critical mass of accredited hospitals. To get the payers adopt pay for quality framework would mean having a pool of about 7500 to 10,000 accredited healthcare facilities out of a universe of more than 20,000 hospitals and nursing homes in the country. Most public and private healthcare facilities do not have the capabilities or capacity to complete the accreditation process within the stipulated time-frame of nine months. Further NABH also has about 200-250 active assessors who have their hands full. To initiate the “Pay for quality” in the country we need to expedite the process of accreditation of hospitals. Hence, FICCI’s multi stakeholder health insurance Advisory Board comprising insurers, providers GSHIS, NABH and World Bank have suggested the staging strategy for accreditation. Further, FICCI is also working towards suggesting a strategy to leverage the empanelment of providers by the payers for enrolment of small healthcare facilities up to 50 beds for accreditation by NABH to "jump-start" the initial evaluation and screening process.

Keeping in mind the diverse nature of healthcare facilities in the country, FICCI has been working on the premise that there should one comprehensive and uniform national quality framework which should be easy to adopt by all levels of healthcare facilities including those that are empanelled for the GSHIS. It was under this background that the minimum quality indicators and empanelment criteria for hospitals were developed. Further, to implement “Pay for quality” in the country a draft incentive disincentive mechanism was suggested. FICCI recommended that one of the first steps to trigger adoption of quality by providers would be for the social insurance schemes to mandate reporting on quality to their provider base. A survey of ~100 hospitals carried out during 2011 by FICCI suggests that most of the providers are in a position to provide data on basic quality indicators. The second step in this regard would be to create a fund that would provide a small cash incentive for providers who are part of the hospital network for social insurance and government insurance to pre-register for quality.

Another very significant initiative undertaken by the FICCI Health Insurance Group has been initiating development of 20 evidence-based minimum standard treatment guidelines (STGs) that would ensure the quality of treatment in all types of healthcare facilities. On behest of IRDA, the Ministry of Health and Family Welfare, GoI, initiated development of STGs across 20 specialities and appointed FICCI to facilitate the process. About ~250 STGs have been developed by a mix of clinical experts from all types of healthcare facilities pan India and peer reviewed by specific clinical associations and submitted to the Ministry. Adherence to treatment guidelines will shift the focus from experiential based treatment to an evidence based treatment. This is significant when quality clinical practitioners are in short supply especially in the rural areas.

FICCI’s role as a thought leader and change agent in enabling quality healthcare in the country has now been endorsed by the IRDA when the latter decided to include the following (with some modifications) developed by FICCI in the proposed health insurance regulations:

  • Standard definitions of critical illnesses
  • Standard list of expenses generally excluded ("non-medical expenses") in hospitalisation indemnity policies
  • Suggested quality indicators
  • Hospital empanelment criteria
  • Standard billing format
  • Standard discharge summary format

FICCI’s continuous endeavour is to facilitate the standardisation process to develop a self sustaining pay for quality framework through consultation and consensus and ensure affordable quality healthcare provision is a reality in the country.

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