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The real cost to insurers is low. Not surprisingly, the impact achieved is low too

Published in MoneyControl, JANUARY 06, 2021 || Written By – ABHISHEK BONDIA

Last week, one of our clients called to inquire about the complementary health check-up bundled with her health insurance plan. Otherwise healthy, her doctor had advised a battery of diagnostic tests when she complained of general weakness. She wanted to use this benefit to cover her costs. This benefit had remained unused by her for the last eight years. There was a certain anticipatory excitement about being able to use this now. Unfortunately, the free feature would not serve her purpose. The package offered by the insurer allowed a complete blood count, ECG, diabetes screening, and lipid profile. It left out many tests, including for Vitamins and Thyroid profile.

It was not possible to customize this package by paying an extra amount. She would have to buy a separate supplementary package and let the lab draw out blood twice. She grumbled when she found out and then moved on to buy a comprehensive health check-up package, independent of the free benefit. Of course, from an insurer’s perspective, the benefit was not designed to replace prescribed diagnostics. It was meant to be a wellness benefit for proactive health check-ups. The question is, do these wellness benefits serve any real need of health insurance clients?

Check-up packages

Insurers provide wellness benefits to differentiate their products. The primary wellness tool thus far has been preventive health check-ups. These have become almost synonymous with wellness. A few years ago, insurers used to provide these check-ups once every four years. However, partly enthused by low utilization, insurers now offer these check-ups annually. Another common wellness benefit is the second opinion. Patients with a severe critical illness can consult with the insurer’s panel of doctors for an independent view of their line of treatment. A benefit sometimes offered by insurers is discounts on OPD treatment in their preferred network.

Insurers would readily tell you that these benefits have low utilization. The real cost to insurers is low. Not surprisingly, the impact achieved is low too. It has earned limited loyalty from insurers. The primary reason for low utilization is the fundamental design. For a healthy individual, with no symptoms or health complaints, there is resistance to voluntarily getting pricked. Added to this, the complexity of availing of the benefit further reduces uptake. On-site corporate wellness programs see higher utilization because of the ease of access but still remain abysmally low in absolute terms.

If we take a step back and assess the hierarchy of wellness benefits, a preventive health check-up is pretty low in the pecking order. A conscious healthy individual is likely to first watch out for her dietary habits. Thereafter, an individual may consider adopting the oft-prescribed open secret to a healthy lifestyle: a morning walk. A smaller subset may get into individualized fitness workout regimes such as gym, aerobics, or yoga. A CEO, who was evaluating setting up a wellness program for his employees summarized it well. “To really make my employees healthy, I should allocate the budget to ensure they wake up early and go for a jog. Going through a health check-up will not make them healthy.”

Getting people to use wellness programs

Ironically, the real wellness benefits are free. In fact, there are umpteen tools available to help you achieve your health goals. The freely available Google Fit app can help track the daily goal of 10,000 steps or 150 heart points in a week. Similarly, there are numerous apps available to track your daily food intake. The real challenge is that these depend on an individual’s initiative and require proactive action. It becomes particularly difficult when people are busy fighting daily fires, and meeting yesterday’s deadlines. Studies indicate that the average number of steps taken by an urban Indian is well below 5000.

At SecureNow, we experimented with a few wellness initiatives. We offered tele-doctor consultations. You could buy an annual subscription plan, which would give unlimited consultations with a high-quality general physician over the phone. The concept was well-received. However, the adoption of the service was low irrespective of the price point. The other initiative was specialist consultation services. We would announce the availability of specialists and policyholders could book an appointment in advance. The latter was highly successful. We often had to extend the availability window to accommodate all requests. On reflection, we realized that the latter initiative serves a latent need – a niggling back pain, work-related stress, or an occasional involuntarily shaking finger. This consultation does not require proactive effort or advance planning. Individuals can react based on their health needs, yet diagnose a problem early on.

The good news is that the insurance industry has now caught onto this idea. Increasingly, initiatives are being designed to ensure high utilization. The IRDAI issued guidelines in September 2020 on wellness and preventive features. The mandate clearly laid out that these features “shall be designed only with the objective of maintaining and improving good health.” Insurers are encouraged to incentivize policyholders with reward points to meet set wellness criteria. These points could be used to avail discounts on renewal premiums or redeemed for membership in yoga, gyms, or sports clubs. The scope has clearly widened beyond hospitals and diagnostic labs. Insurers have the opportunity to set the wellness criteria based on a policyholder’s lifestyle and not just health status.

In the earlier discussed case of the health insurance client, this could mean a user-oriented approach to wellness. The insurer could convert the annual health check-ups into reward points. Accrued over eight years, these points could be redeemed by the insured towards a health check-up program of her choice. It would eliminate the remorse of an unused benefit and help the policyholder serve a real need. The insurer could continue prescribing their preferred network for redemption. A higher utilization for diagnostics would enable early detection, as well as give greater ability to steer patients in case of hospitalization claims. Thus, it would be a win-win situation for both the insurer and the insured.