06 August, 2010

Cashless settlement withdrawal & issues surrounding it

Would you like if a shopkeeper offers you a product at one price and the next buyer at a 50% discount? Well… no one likes it. But this practice happens in a few industries. Airlines & hospitals are prime examples. An airline seat on which you may be sitting may have been sold on one price and your co-passenger may have bought it at maybe half the price. Airlines justify on the basis of the fact that this passenger booked in advance and hence got a special price.
Now, look at hospitals... If you are admitted in a hospital and an operation needs to be performed, the price varies depending on which ward you are admitted in. If you are from the general ward, you pay a lower amount for an operation and you pay a much higher amount if you happen to be from a deluxe room. The charges can be substantially higher. This, inspite of the fact that the doctor, operation theatre etc. are all the same. This unsavory practice has been there for a very longtime and doctors bristle when someone even question this. Robbing the rich ( or the relatively well-off ) is an art perfected since the days of Robinhood… and this has got entrenched so much that it is an accepted practice & cannot even be questioned!
Now, the second problem… Many hospitals have ostensibly been charging a high amount if a patient has insurance and entirely a different ( and lower ) amount, if they don’t. This has been one of the worst kept secrets and has been bleeding the insurance companies. It’s ironical that insurance companies are charged higher rates… they should actually be charged lower rates and get quantity discount, as they provide huge business to various hospitals. After bleeding for a longtime, PSU insurers have decided to stop cashless settlement in all, but a select list of Preferred Provider Network ( PPN ), where cashless will be applicable. Private insurers are still having cashless facility.
There are several questions in the mind of the consumer.
Do I now go to the private insurers now – They are offering cashless settlement across hospitals today, as against the PSU insurers – granted. This alone cannot be a determinant. Today it is PSU insurers. Tomorrow, it can be private insurers. PSU insurers have got affected most in this, as their premiums have been comparatively less. Some hospitals accuse the insurers of not having ailment based cover and having just a value based cover, due to which insured goes for expensive treatments… Some hospitals claim that charges can vary from hospital to hospital, based on facilities available. But the issue is that hospitals have different tariffs for those having insurance and those without.
Insurers need to fix up specific and low tariff rates with hospitals, like CGHS has done with various hospitals. In future, most people would have insurance cover and business from insurance companies will become, bigger & bigger for hospitals. Hence, they should provide volume discounts like it happens in every business.
Ignore inflated bills at your peril - Another problem noticed with patients who have insurance is that they do not bother much, as long as the bill gets settled in a cashless manner. Inflated claims by hospitals reduces the residual cover available for the year. Also, inflated claims result in more extra premium charged, in the next year. Signing the bills without checking will also expose the insured to allegations of fraudulent claims, if some procedure was not done and claimed for. These things are happening today. It is in one’s own interest to ensure that excessive or fraudulent claims are not made. The insured can take the help of the medical professionals in an insurance company or could get the same checked by an external medical professional, before signing papers, put before them. They should resist any attempts by doctors or hospitals into pressuring them to sign on the dotted line.
Keep some cash… Till the dust settles down, it would be a good idea to pay the bills and get reimbursed later. That way the bills will be more in line with the services availed. Also, it is a good idea to find out in advance, the rates for procedures & fees of doctors, fix it up and then only go ahead. In all cases, except emergency cases, this should be possible. This can help you get a fix on how much it would cost and be ready with the finances.
Be flexible - Lots of people are attached to their doctors… and doctors recommend certain hospitals. It will be a good idea to be flexible and be willing to move to a different doctor or hospital, if you know your current preferred doctor/ hospital is over-charging. There is nothing better than a bit of competition – get quotes from different doctors & hospitals. You will be able to save quite a packet by just asking around.
Best thing one could do today is to ensure good health by a combination of exercise, good working habits, healthy eating habits, avoiding/ cutting down on smoking/ drinking etc. Health is wealth. An apple a day keeps the doctor away. Eat apples – that’s the best finance tip you can get today!

Published in DNA Money on 6/8/2010

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