Health Insurance as a Healthcare Financing Mechanism in India: Key Strategic Insights and a Business Model Perspective

This study provides strategic insights and a business model perspective on health insurance as a vehicle for financing healthcare. It uses both primary (expert interview) and secondary data to investigate the overall disease burden and healthcare industry trends and track healthcare financing through the health insurance mechanism in India. To identify the critical success factors and to gain a business model perspective within the health insurance industry, telephonic and face-to-face interviews were held with 27 experts in the healthcare, insurance, and strategic management field. The study’s findings suggest that the growth of health insurance as a healthcare financing mechanism in India has been challenged continuously and impacted by multiple changes in the health insurance and healthcare industry over the last decade. One of the critical challenges faced by insurance companies is the high incurred claim ratio. We find the Indian health insurance industry to be very competitive and that the focus on critical success factors can help insurance companies gain a competitive advantage. The health insurance business model is unique, with varying configurations, and broadly comprises strategic choices and consequences. In this article, drawing from the strategic management literature on the resource-based view (RBV) and insights gained from the interviews of healthcare and health insurance experts, we highlight the six critical success factors relevant for competing in the health insurance business. We also list five strategic choices that can help health insurance companies improve their profitability and gain a sustained competitive advantage. We recommend that the insurance companies design and develop an innovative business model centred around lowering the claim ratio and simultaneously increasing the customer willingness to pay. To increase the customer willingness to pay and reduce the claim ratio, the insurance companies should focus on the six critical success factors and invest in the five strategic choices.

Overt dependence of health insurance industry on healthcare system

A vast majority of the population in the developing economies remains uninsured. Moreover, the informal sector that employs a larger section of the society is untouched by any of the government scheme. In this study, we use health belief model to examine the factors that induce willingness to buy health insurance among the illness and the non-illness group. A cross-sectional study was conducted on 1,339 participants above 20 years of age of which 351 had contracted illness in the past and 988 had not. Data was collected using questionnaire from four highly populated districts in India. The questionnaire was developed based on the constructs of health belief model. The data was statistically analysed. Kendall’s Tau-b correlation technique was used to explore the relationship between perceived vulnerability and product aversion. Logistic regression was used to find out the odds at which each independent variable, categorised based on the health belief model, contributes to willingness to buy. The model was able to predict 15% of the variance for willingness-to-buy among the illness and 27% among the non-illness groups. Findings suggest that the perceived vulnerability reduced product aversion among the illness group. Mere presence of primary and super-specialty hospitals was not sufficient for the illness group to subscribe for health insurance. Income perceptions emerged as a significant predictor among the illness group. Presence of well-established hospital, income perceptions, and subjective norms were significant predictors among the non-illness group. The growth of the health insurance industry largely depends upon the presence of well-established hospitals. In the absence of adequate healthcare facilities, attempts by the insurers to promote insurance covers will become futile. Insurers should also consider alternate segmentation patterns albeit the present socio-demographic pattern, as the health risk experience differs among individuals.

Influence of service quality on consumer loyalty: a mediation analysis of health insurance

PurposeThis study aims to examine the influence of service quality (SQ) on customer loyalty (CL) and the mediating role of customer satisfaction (CS) and customer perceived value (CPV) in health insurance products in Malaysia.Design/methodology/approachData were conveniently collected through a self-administered questionnaire from subscribers to health insurance products and services in Malaysia. A total of 456 available questionnaires were used in the analysis. Partial least square (PLS) structural equation modelling (V3.3) was used to obtain the study results.FindingsA positive relationship is observed amongst the studied variables. In addition, CPV partially mediates the proposed relationship and also indirectly mediates the relationship between SQ and CS. Lastly, CS partially mediates the proposed relationship. Hence, all proposed direct and indirect relationships are significant and positive.Research limitations/implicationsThis research increases the authors’ understanding of the role of CS, SQ and CPV on CL in the health insurance industry in a developing country. The study also shows that insurance companies must establish positive relationships between insurers and customers by providing excellent SQ to maintain CS and loyalty.Practical implicationsThis research will help managers and guide the policymakers to establish a national health financing scheme. Furthermore, these results will guide industry players on how to maintain existing and targeting customers.Social implicationsThis study has attempted to provide a comprehensive understanding of CL in the Malaysian health insurance industry. Considering the limited research in the Malaysian health insurance context, this study can provide theoretical contribution and a managerial basis for future studies, including implications for the managers. However, to date, research in this sector under the Malaysian context is not adequate to consider SQ, perceived values and CL factors.Originality/valueThis study has attempted to provide a comprehensive understanding of CL in the Malaysian health insurance industry. Considering the limited research in the Malaysian health insurance context, this study can provide theoretical contribution and a managerial basis for future studies, including implications for the managers.

The Changing Narrative in the Health Insurance Industry: Wearables Technology in Health Insurance Products and Services for the COVID-19 World

COVID-19 pandemic, the associated economic lockdown and the norms of social distancing have disrupted the business world. Most managers have struggled to make sense of the chaos and complexity around. Health insurance industry mangers are at the forefront of this challenge as new products and services covering COVID-19 had to be launched fast. This was both a market as well as the societal requirement. In the COVID-19 world, in different countries like United States of America (USA), United Kingdom (UK), Germany and India, attempts are being made to develop mobile applications for tracking COVID-19 patients. Emerging technologies have been altering the business landscape in most industries. The health insurance industry has also been witnessing the effects of technologies such as wearables technology, big data analytics, cloud technologies, blockchain, machine learning and such others. The advent of these technologies is fundamentally changing the health insurance industry. Given the realities of the COVID-19 world, the health insurance industry is poised at a crossroad of evolution where the industry would become data-intensive and data-driven. Health insurance firms have to enter into interfirm collaboration with wearable technology firms in the conversation on tracking social distancing from COVID-19 positive and potential cases. Health insurance firms might develop a service mechanism which could while maintaining the anonymity of COVID-19 positive or potential cases, ensure that customers who are using the wearable technology products and following social distancing norms are provided favourable premium for COVID-19 related health insurance products in case they were infected. This would be a novel addition to COVID-19 related products of health insurance firms. Deliberating on these aspects in this article, the authors propose a fundamental shift in the strategic orientation of health insurance firms.

COVID-19 Has Revealed America’s Broken Health Care System: What Can We Learn?

The COVID-19 pandemic has exposed long-standing system problems of U. S. health care ranging from access barriers, uncontrolled prices and costs, unacceptable quality, widespread disparities and inequities, and marginalization of public health. All of these have been well documented by international comparisons. Our largely privatized market-based system and medical-industrial complex have been ill equipped to respond effectively to the pandemic. The accompanying economic downturn exacerbates these problems that further reveal the failures of our largely for-profit private health insurance industry, dependent as it is on continued government subsidies while it profiteers on the backs of vulnerable Americans. This article brings historical perspective to these problems, and provides markers of the extent of our unpreparedness and ineffective response to the pandemic. Coherent national health and public health policies are urgently needed based on evidence-based science, not political pressures. Financing reform is necessary, such as through single-payer Medicare for All. Eight takeaway lessons are summarized that can help to inform now best to rebuild U. S. health care and public health, an urgent task for the incoming Biden administration.

Innovatizing the Insurance Business in the Development of Digital Economy

The article defines the current trends of innovatizing the insurance business in the digital economy. The stages of development of modern insurance technologies (InsurTech), which are innovative products in the insurance sector of financial infrastructure, are provided. The instruments of digitalization of business processes for sale of insurance products, settlement of insurance claims, bookkeeping and tax accounting, risk underwriting, document flow are presented. The dynamics of global investments in technological innovations of insurance companies on a global scale have been specified. The volume of global investments and concluded agreements in InsurTech sector by insurance sectors is analyzed and it is proved that 2020 is a period of awareness of the importance and role of digital technologies implementation in the insurance industry, recognition of the value of the digitalization vector of insurance business and global investments in InsurTech development with the highest recorded values. It is identified that the leader in attracting investments in the processes of innovatizing is the property insurance industry (P&C), which has compiled 53% of the total financing and 63% of the concluded agreements. The individual health insurance industry (L&H) ranks second in terms of indicators, maintaining overall investment attractiveness, high amounts of financing and the introduction of insurance technologies. The economic, technological, organizational management, and legal factors that stimulate or inhibit the innovative activity of insurance companies in Ukraine are systematized. Based on the generalization of problems and weaknesses that are relevant and impede the desired pace of innovatizing the insurance business in the digital economy, a SWOT analysis matrix of the feasibility of InsurTech implementation is proposed. It is determined that the introduction of innovations and the development of insurance on the basis of digitalization are currently a catalyst for the strategic development of the insurance business, improving the quality of insurance products and successful activities in an increasingly customer-oriented financial sector.