Amid rising costs and losses, there are hopes and expectations for health insurance to be profitable and sustainable, said speakers at the 7th Middle East Healthcare Insurance Conference in Dubai recently.
Various stakeholders need to work together to ensure the profitability of the healthcare sector, said speakers at this year’s Middle East Healthcare Insurance Conference, where sustainability was a dominant theme.
“The whole market needs to be sustainable, and this is the responsibility of all members of the system, including patients,” said Dr Haidar Al Yousuf, Director of Health Funding with the Dubai Health Authority (DHA).
Building efficiency
The DHA has been trying to build efficiency in the market, and one way it has done so is by implementing electronic claims. Introduced over a year ago, this has seen all health insurance claims managed electronically, with a view towards bringing uniformity in data, reducing abuse and giving the DHA real-time visibility of health spending.
“E-claims allows us to look at the overall efficiency of the health system in Dubai. It is the best way to capture all related information,” said Dr Al Yousuf.
However, some believe that having two healthcare systems in the UAE – in Dubai and Abu Dhabi – is defeating efforts at building efficiency. “Having multiple systems in one country is difficult for MNCs,” said Mr David Hadley, CEO of Mediclinic Middle East.
The way to sustainability: do’s and don’ts
So how can the market be sustainable? Speakers shared some ideas.
Do:
1. Get things right from the beginning
It is important to get things right at the design stage of any health funding system, said Mr Wayne Jones, Partner, Middle East Regional Office, Insurance and Dispute Resolution with Clyde & Co.
“If, during the design stage, you take the right expertise on board, you might find answers to the problems,” he said, pointing out that not much has been done to tap into the expertise available in the Qatar Financial Centre and the Dubai International Financial Centre.
2. Underwrite conservatively through client segmentation
Losses tend to come from “jumbo” clients, said Mr Hatim Maskawala, Senior Manager – Actuarial Services, Risk Management, Abu Dhabi National Insurance Company (ADNIC), citing evidence of a company’s loss ratio jumping by ten percentage points because of just two policies from one such client.
Mr Mark Adams, CEO of Anglo Arabian Healthcare, agreed. “The challenge is that providers need the volume, but when you analyse the numbers, most profits come from individual clients rather than large corporates.”
3. Tackle fraud
It is important to understand that fraud can come from patients or providers, said Mr Adams. “Sometimes it’s because of the systems, sometimes it’s because of education. It may not always be chronic abuse.”
He suggested that the industry work together in tackling the issue. “There’s a lot more benefit to a combined approach than just acting as a policeman and doing one’s own investigation.”
Co-payments could also be one solution at the patient level, suggested Mr Daniel Whitehead, MENA Region Healthcare Lead with Booz Allen Hamilton. “It doesn’t result in less care or lower outcomes, but it could mean lower costs,” he added.
4. Standardise loss ratio reports
The existing loss ratio is “hurting the market a lot”, and part of the problem lies in the fact that loss ratio reports are not standardised, said Mr Maskawala.
“The banking sector has a centralised credit database, and the motor sector has a centralised loss history. As an industry, we need to come together to standardise loss ratio reports,” he said.
Don’t:
1. Give discounts - unless they are built into your pricing
“If you do not build discounts into pricing, you will need to load more clients,” said Mr Maskawala.
2. Depend on regulators to solve your problems
All players need to work together to overcome the challenges, said speakers.
“Regulators don’t have that magic wand that can instantly resolve all issues,” said Mr Andre Daoud, Chief Business Officer of NEXtCARE and Conference Chairman.
“A regulated environment will attract more investments, but we’re not going to over-regulate,” said Dr Al Yousuf. “I see players and providers expecting regulators to do everything. We need to get out of (this mindset). We need everyone to mature, and we need to work together with the sector.”
The golden opportunity
The conference was reminded that a key component of sustainability is keeping the main beneficiary, the patient, at the centre of any healthcare system. “At the end of the day, the system has to work for people and add value to the community,” said Dr Al Yousuf.
“Money will come if the focus is on the patient,” said Mr Daoud. “Every market has its challenges, but we have the golden opportunity to get things right.”
This year’s Conference attracted a record number of 125 delegates. It was sponsored by NEXtCARE (Gold Sponsor) and Neuron, and supported by ArabMedicare.com, the International Insurance Society (IIS) and PHM International.
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On the pulse of compulsory insurance
Recent developments in compulsory health insurance were shared during the conference.
UAE
On when Dubai’s long-awaited mandatory scheme would be implemented, Dr Al Yousuf said this could not be compared to “switching on the light”.
“We need to make sure all the different components are mature enough,” he said. “It is important for us to tick all the boxes, dot the ‘i’s and cross the ‘t’s. At the end of the day, the system has to work for people and add value to the community.”
Having passed its own law in 2005, Abu Dhabi had lessons to share. “You need to have creative ideas, you can’t copy and paste from any other system. Everything needs to be customised,” said Ms Lina Jichi, Head of Financing Advisory and Monitoring with the Health Authority of Abu Dhabi.
Saudi Arabia
The Kingdom, a regional pioneer in compulsory health insurance for expatriates, is now looking at extending coverage to Saudi nationals in the private sector.
Mr Sarry Al Burraik, Healthcare Expert and Advisor to CEO, King Fahad Medical City, disclosed that the government is now conducting a study on inducting these nationals – numbering over five million – into the system.
“What we are looking into is covering them for life, not just the period of work,” he said, “as well as how to transition from, or build on the current system.”
Qatar
Qatar’s National Health Insurance Scheme, which kicked off in July this year, is the reverse of what has been done in Abu Dhabi and Saudi Arabia as it covers nationals first, noted Mr Jones of Clyde & Co.
The first phase of the five-stage scheme covers the maternity, obstetrics, and gynaecology needs of all Qatari women aged 12 upwards, while the second phase beginning in the first quarter of 2014 will cover the remaining segments of the Qatari nationals. By the end of 2015, Qatar’s entire population, including visitors, is expected to have mandatory health cover.
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