Gulf News Interview Questions André Daoud, Chief Business Officer
December 01 2017
1. There is the impression that non-basic health premiums are starting to firm up, in some cases quite significantly. I am talking about the Dubai marketplace in particular. Would you say it's part of the natural inflationary pressure on health premiums? Healthcare insurance premiums have been historically on an increasing trend year on year, in light of various factors that contribute to this trend. Factors range from patients increased awareness, introduction of new services, medicine evolution, utilization, improved life span with more elderly people, additional cures and others. With those factors continuing to evolve, it’s expected for premiums to continue to rise. Having said that, it’s usual, in times where health insurance mandates are introduced into markets, for people to procure coverage for strict compliance reasons at the onset. This leads to profitable premium pools and less utilization. With time progression, utilization is expected to increase and premiums to readjust in light of increasing trends. Healthcare is one of the most complex lines of insurance and is part of a wide and inter-connected ecosystem.
2. Many said that more insurance providers joining in the Dubai Health Authority's mandatory coverage scheme will keep premiums under check. Would you say that on the basic side, it is still the case? What are the current payments on the basic policy? (And these are annual payments, right?) With more insurers on the offering the basic DHA package, competition will lead to additional options and will drive premium downwards. With this happening, DHA health funding has been playing an instrumental role in scrutinizing participating insurers on various aspects. Deliverables have been expected at product, service and pricing level. On the pricing side though premiums may become more competitive, any premium drop has had to be justified to the regulator prior to change. This mechanism will provide balance to both the supply and demand.
3. Since 2017, co-insurance payments have become a regular feature of the health insurance scene. Would you say that the majority of policies have a coinsurance component of 20 per cent? Any chance that it could go higher? Co-participation has historically proved to be one of many possible effective ways of cost containment on health insurance. This mechanism engages the patients in sharing the expenditure along with the insurer. It is key to keep in mind that a controlled spend, means lower claims ratios leading to healthier premiums and indirectly positively affecting the population. A 20% co-participation is considered to be quite effective when looking at plans with such similar shares. It is also believed to be on the higher side from a practice perspective and unlikely to see patient shares increase beyond. The mechanism works in a way that medical providers choice is determined based on cost as the more expensive the provider the higher the patient share is, which indirectly steers patients towards more cost effective service providers. 4. Is it the case that health insurers are reducing their coverage provided to smaller clinics and medical facilities? And they are encouraging the insured to go only with select healthcare providers? A wide range of products are offered on the markets that vary from the Essential Benefit Packages (EBP) to international high end products. A key element determining the product cost is the network offered, which in the case of low end products has to be carefully selected in a way it’s diversified enough without compromising on costs. One of the most effective models has been the Primary Care Physician (PCP) Network that enables patients to access adequate health services at primary levels and specialists and consultants are accessed on referral basis. 5. Being still early days on mandatory health coverage in Dubai, would you say it might take longer for healthcare premiums (outside of the basic) to find their natural levels? Indeed, healthcare premiums are expected to vary over the course of the coming few years in line with the maturity of the market and patients changing claiming patterns and behavior. A dip could be expected at the onset with readjustment over the course of the years. 6. Have insurers escalated the scrutiny on how - and what - healthcare providers are invoicing for? This has been a life-long challenge in finding the right balance between cost containment and adequate level of medical services offered. It is natural as competition grows further and pressure on premium increases that the need to further scrutinize claims and deep diving into provider’s performance becomes stiffer and more focused. If expenditure becomes loose for a reason or the other that would affect the entire ecosystem and may lead to increased costs which would back fire on the end user who in turn would have to pay higher premiums. It is therefore the duty and obligation of the insurers and administrators to consistently monitor provider’s performance. 7. Does it make sense for the co-insurance component to be reduced on the pharma/medicine side? Co-insurance on pharma may be revisited however any drop in co-participation would mean higher spend and indirectly coming back in the form of spend. An effective way would be to reduce co-participation when generic drugs are prescribed, which may mean lower drug costs leading to a balanced approach.
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