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The Rs 500 crore health insurance market is all of a sudden seeing a lot of activity. A new breed of Third Party Administrators (TPAs) will now enter the insurance scenario to play the role of intermediaries to facilitate insurance distribution in addition to the other services they offer.
Role of Third Party Administrators:
Third Party Administrators (TPAs) are the middlemen in the chain of integrated delivery systems that bring all the components of health care delivery - such as physicians, hospitals, clinics, home health, long-term care facilities and pharmacies - into a single entity. They will provide quality health care and services at affordable costs, which hitherto was unheard of. The role of TPAs will particularly be beneficial to those sections of society for whom quality healthcare has always remained a dream.
Advantages:
- Affordable Cost:
This new breed is expected to bring about a total transformation
in healthcare management with affordable costs and improved quality healthcare.
It will also bring about a change in the mindset of the masses regarding the
concept of managed and preventive healthcare.
- Improved Quality:
Such a system encourages appropriate treatment, discourages over-treatment, encourages preventive care, and attempts to promote cost containment and quality health care delivery.
- Cashless System:
The entry of TPAs means the arrival of a cashless system of payment for healthcare services. The policyholders would receive every healthcare facility required depending on their needs and high medical costs will not be a deterrent.
Function:
As per the regulations worked out by Insurance Regulatory
Development Authority (IRDA) a clubbed fee would be charged from the insurer,
who will also be the sole bearer of the financial risk. Each TPA would need
to have and maintain assets worth at least Rs 25 lakhs. This may be doubled
later to avoid frivolous players entering the market. TPAs will also need to
take insurance policies for at least Rs 1 crore to cover their own business
risks.
There are a number of TPAs functioning in different parts of the country, but these at present cater solely to corporate clients.
The final modalities regarding the role of TPAs and the procedure to be followed are yet to be worked out. But healthcare companies are optimistic about the changed scenario and see vast scope in the health care industry.