PWC: Transforming health insurance in India via a digitally enabled Ayushman Bharat
The global health insurance industry is in a state of rapid transition owing to multiple factors such as an increased focus on healthcare by governments across countries and increased awareness about chronic diseases and prevention methods. It is expected that the health insurance market will generate a revenue of USD 2.2 trillion by 2024 globally, at a compound annual growth rate (CAGR) of 4.3% during the forecast period. The Asia Pacific (APAC) region is expected to grow the fastest, at a CAGR of 5.7% between 2019–2024.
The Indian healthcare industry is also a part of this transition and is witnessing an increased push, especially from the government. In an attempt to improve the healthcare provisions for its citizens, the government has launched a number of welfare schemes and policies. With a majority of the rural population still not having access to quality healthcare, the government is focusing towards increasing penetration in rural areas.
As per the India Brand Equity Foundation (IBEF), the Indian life insurance industry is expected to grow at a rate of 12–15% for the next 3–5 years. The health insurance sector in India is classified into three types, out of which two hold majority of the market share – group health insurance (48%), individual health insurance (41%) and government-sponsored health insurance (11%).
With growing digitalisation, health insurance schemes and policies have become even more viable. This shift in regulations via policies and welfare schemes is giving a new direction to healthcare providers and insurance companies. Companies today need to ensure that they are not only able to meet the evolving needs of their customers, but also comply with the regulatory mandates from the government and keep up with the technological advancements to maintain their edge in the competitive landscape, while generating value in a cost-efficient manner.
The Government of India’s (GoI) health insurance schemes aim to ensure that high quality healthcare services are accessible to all citizens, especially families belonging to economically weaker sections of the society. One such key health insurance scheme is Ayushman Bharat, which was launched in September 2018. It aims to improve India’s healthcare facilities and insure 10.74 crore identified families by provisioning INR 5 lakh for each family in a year, with no cap on the number of members in a family. The scheme offers cashless hospitalisation and is available across a network of public and private hospitals.
With the introduction of this scheme, the current health insurance models are bound to be disrupted as healthcare and insurance ecosystems brace themselves for this change. This paper focuses on the health insurance coverage under the Ayushman Bharat scheme, also known as the Pradhan Mantri Jan Arogya Yojana (PMJAY). Furthermore, it highlights the challenges that the scheme has to overcome and the role that technology can play in enabling its successful adoption. These recommendations are based on surveys conducted by PwC between September and November 2019, which involved more than 35 key stakeholders (healthcare providers and insurance companies).
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