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Journal of the Academy of Hospital Administration

Vol. 16, No. 1 (2004-01 - 2004-06)


The Healthcare industry is in the throes of a major transformation. Opening of the insurance sector, particularly health insurance will bring about far reaching changes in the healthcare scenario in India. It has been projected that from the current level of three million, the number of people covered by health insurance will go up to 30 million by 2005 and 160 million by 2010. We can safely assume that 70 percent of those insured will be those insured people will be those who cannot presently afford, or seek quality medical treatment in private hospitals. This translates into a massive new customer base who would demand quality healthcare service with benchmarking. The earlier available insurance cover related primarily to monetary limits and not on the extent of medical care. The cost of care also remained uncontrolled. The IRDA bill will broadly protect the interest of the healthcare consumer. It would simultaneously allow for growth in the insurance market.

The emerging Indian Healthcare sector will witness growth and opportunities for both the providers and healthcare insurance agencies. However, disquieting trends are bound to pose challenges. One would be healthcare delivery on "cost vs benfit" equation. Indiscriminate procedures add substantially to the cost and DRG's are expressions of judgements on the effectiveness of procedures which are unproven or marginally effective. Insurance providers are likely to question such costs. These and many other issues will confront all healthcare service providers in the coming years.

A. Chakravarti

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