Who will save the future of medical insurance?
THE cost of health care in Uganda is rapidly rising, perhaps faster than any other living costs. The rate at which it is rising is more than worrying for us who have keenly watched the cost of a doctor’s consultation fee rise from sh10,000 to sh30,000 or even sh60,000 for a specialist, in less tha
Anna Turumanya
THE cost of health care in Uganda is rapidly rising, perhaps faster than any other living costs. The rate at which it is rising is more than worrying for us who have keenly watched the cost of a doctor’s consultation fee rise from sh10,000 to sh30,000 or even sh60,000 for a specialist, in less than two years.
The cost of drugs and other health care facilities is rising at an even more alarming rate. Today, if it were not for insurance facilities, many of us would fail to meet the cost of quality medical care. For some section of the public, medical insurance is still a luxury not yet achieved and, hence, the pinch of accessing health care becomes a huge burden daily.
Health or medical insurance, like other forms of insurance, is a means by which people collectively pool their risk, (in this case the risk of incurring medical expenses) together and transfer it to an insurance organisation in form of payment of a certain amount of premium intended at meeting their cost of health care.
It may be purchased on a group basis (for example by a firm to cover its employees) or purchased by an individual. In either case, the covered groups or individuals pay premiums or taxes to protect themselves from unexpected health care expenses.
Like all other forms of insurance, medical insurance also operates on a probability basis whereby it is assumed that not everyone in that pool shall seek medical care hence providing a chance to those who fall sick to claim to levels much higher than the individual premiums collected.
In Uganda, a concept similar to medical insurance has been in existence for longer than the actual medical insurance business. This is operated by the health maintenance organisations such as AAR and IAA. These organisations own medical facilities and collect premiums from individuals and/or corporate organisations hence allowing them to use their facilities for a given period of time.
Slowly, but steadily, some insurance companies have taken on the challenge of offering medical insurance to Uganda’s corporate world, following basic insurance principles such as underwriting the business, re-insuring the risk as well as succumbing to other regulations of the Uganda Insurance Commission.
The rising medical inflation presenting in form of increased cost of drugs, cost of professional fees and diagnostic fees might be one of the main challenges that the industry is facing, but definitely not the most pressing. Today, what continues to pose the main challenge is the increasing number of malpractice and fraudulent claims that insurance companies are registering. This presents itself in various forms top of which being that non-members will always attempt to access these services either through fabricated membership cards or by “borrowing†cards from eligible members.
Either way, the insurance company which relies on the probability rule is in for a rude shock as more claims are registered than anticipated. Additionally, the medical practice continues to evolve daily. For example, gone are the days when a baby was safely delivered by a midwife. Today, an average mother will be attended to by a midwife, a doctor (general practitioner), a specialist (gynaecologist or obstetrician), a paediatrician and neonatologist to ensure that both the baby and mother come out of the procedure well. This sort of care is what every mother would wish to get, but it comes with a cost and, unfortunately, the cost is proving to be more than insurance companies can afford, hence it becomes unsustainable.
Additionally, everyday comes with the evolution of all forms of medical technology as well as specialisations. Although the hi-tech is appreciated it comes with a cost and consequently, this price is felt by the insurance companies. The good news for the insurance companies is that when this sort of medical inflation is noted, the burden is directly transferred to the clientele in form of increased premiums. This has seen annual medical premiums rising by outstanding percentages (ranging from 15% to 50%).
Many employers have expressed a concern that this sort of raise is not even possible for other company budgets. Consequently some employers have opted for managed care schemes, where they pay directly for their costs or sticking to health maintenance organisations which can afford to charge less premiums because they own their own facilities and hence can control their costs. Obviously both options have their challenges.
The question to ponder is: How sustainable is the rising cost of medical care in Uganda? If Insurance companies fail to cope with the rising medical inflation where else do the solutions lie?
I urge every player in this business to ensure that the medical insurance business runs smoothly and fairly. Let the subscribers, the health care providers and insurers all handle their end of the bargain ethically, with authenticity, efficiently and effectively.
I also request those who have the power to review the trend that the cost of medical care is taking so as to help regulate and control this cost so that Ugandans benefit from premium health care services on top of these being medical insurance services.
The author is PR manager, medical department of the East African Underwriters
THE cost of health care in Uganda is rapidly rising, perhaps faster than any other living costs. The rate at which it is rising is more than worrying for us who have keenly watched the cost of a doctor’s consultation fee rise from sh10,000 to sh30,000 or even sh60,000 for a specialist, in less than two years.
The cost of drugs and other health care facilities is rising at an even more alarming rate. Today, if it were not for insurance facilities, many of us would fail to meet the cost of quality medical care. For some section of the public, medical insurance is still a luxury not yet achieved and, hence, the pinch of accessing health care becomes a huge burden daily.
Health or medical insurance, like other forms of insurance, is a means by which people collectively pool their risk, (in this case the risk of incurring medical expenses) together and transfer it to an insurance organisation in form of payment of a certain amount of premium intended at meeting their cost of health care.
It may be purchased on a group basis (for example by a firm to cover its employees) or purchased by an individual. In either case, the covered groups or individuals pay premiums or taxes to protect themselves from unexpected health care expenses.
Like all other forms of insurance, medical insurance also operates on a probability basis whereby it is assumed that not everyone in that pool shall seek medical care hence providing a chance to those who fall sick to claim to levels much higher than the individual premiums collected.
In Uganda, a concept similar to medical insurance has been in existence for longer than the actual medical insurance business. This is operated by the health maintenance organisations such as AAR and IAA. These organisations own medical facilities and collect premiums from individuals and/or corporate organisations hence allowing them to use their facilities for a given period of time.
Slowly, but steadily, some insurance companies have taken on the challenge of offering medical insurance to Uganda’s corporate world, following basic insurance principles such as underwriting the business, re-insuring the risk as well as succumbing to other regulations of the Uganda Insurance Commission.
The rising medical inflation presenting in form of increased cost of drugs, cost of professional fees and diagnostic fees might be one of the main challenges that the industry is facing, but definitely not the most pressing. Today, what continues to pose the main challenge is the increasing number of malpractice and fraudulent claims that insurance companies are registering. This presents itself in various forms top of which being that non-members will always attempt to access these services either through fabricated membership cards or by “borrowing†cards from eligible members.
Either way, the insurance company which relies on the probability rule is in for a rude shock as more claims are registered than anticipated. Additionally, the medical practice continues to evolve daily. For example, gone are the days when a baby was safely delivered by a midwife. Today, an average mother will be attended to by a midwife, a doctor (general practitioner), a specialist (gynaecologist or obstetrician), a paediatrician and neonatologist to ensure that both the baby and mother come out of the procedure well. This sort of care is what every mother would wish to get, but it comes with a cost and, unfortunately, the cost is proving to be more than insurance companies can afford, hence it becomes unsustainable.
Additionally, everyday comes with the evolution of all forms of medical technology as well as specialisations. Although the hi-tech is appreciated it comes with a cost and consequently, this price is felt by the insurance companies. The good news for the insurance companies is that when this sort of medical inflation is noted, the burden is directly transferred to the clientele in form of increased premiums. This has seen annual medical premiums rising by outstanding percentages (ranging from 15% to 50%).
Many employers have expressed a concern that this sort of raise is not even possible for other company budgets. Consequently some employers have opted for managed care schemes, where they pay directly for their costs or sticking to health maintenance organisations which can afford to charge less premiums because they own their own facilities and hence can control their costs. Obviously both options have their challenges.
The question to ponder is: How sustainable is the rising cost of medical care in Uganda? If Insurance companies fail to cope with the rising medical inflation where else do the solutions lie?
I urge every player in this business to ensure that the medical insurance business runs smoothly and fairly. Let the subscribers, the health care providers and insurers all handle their end of the bargain ethically, with authenticity, efficiently and effectively.
I also request those who have the power to review the trend that the cost of medical care is taking so as to help regulate and control this cost so that Ugandans benefit from premium health care services on top of these being medical insurance services.
The author is PR manager, medical department of the East African Underwriters