Private health insurers virtually unregulated

Private health insurers have been left to their own devices due to weak regulation from the industry regulator, the National Health Insurance Authority (NHIA), says General Manager of Nationwide Mutual Healthcare, Anthony Sowah.

Nationwide is the biggest of 22 licenced private health insurance providers, which under law are to be registered and supervised by the NHIA.

But the regulator's focus, Mr. Sowah said, is on the state-sponsored National Health Insurance Scheme (NHIS, while little attention is being paid to the activities of private insurers.

“We face challenges, yet regulation is weak in this country. We are in an industry where participants come and exit at will, yet it is an industry where the service providers hold monies in trust for members because premiums are paid in advance, and are expected to pay for the healthcare needs of members.

“And it isn't just any need we are addressing, but healthcare needs. So if such an important industry is left unregulated, then it creates problems,” he said in an interview with the B&FT.

Due to the weak supervision, some players have unhealthy market pricing policies that could undermine the industry's credibility.

Most players, he said, do not set their premiums based on sound actuarial calculations but simply to undercut the business of huge and well-resourced providers -- creating risks not just for their business but the whole industry and its reputation.

“By virtue of being pioneers and leaders, we have invested a lot into human resources, ICT infrastructure and actuarial resources just to help us with a good analysis of the industry and to help with-decision-making.

“Most of the others have adopted a very simple pricing method. They look at what Nationwide is doing and then cut the price by 10 to 20percent. So when you are about to close a business with a client or renewing a business, the client will then bring out the prices of our competitors and then they are tempted. But we know the sound actuarial basis of arriving at premiums, so it becomes difficult for us to come down to the level of those competitors,” he said.

Another kind of challenge comes from clinics and hospitals which seek to profit from insured health care by charging for services not rendered, or choosing treatment that brings in the most revenue from private insurers.

“For example, patients may come with simple stress-related conditions which require rest or lifestyle management, but doctors could load the patients with drugs because the drugs are getting to their expiry dates and the hospitals don't want to bear the losses.

“Some hospitals also blatantly attempt to defraud. So services not rendered are billed simply because an insurance company is paying for the services,” he added.

He said to deal with this challenge, Nationwide has a very strong internal vetting system that starts from the moment claims are submitted and ends with review by a vetting committee composed of a team of doctors from different backgrounds.

The company also has a standing audit team that visits and carries out clinical audits on- site.

“We may take a couple of claims, visit your facility and demand the patient's folder because no doctor will lie in the folder. If you 'over-service' somebody and it is not in the folder, then you want to defraud the health insurance provider.”