Technology Innovation as a Principal Catalysts for healthcare sector

Transcription

1 Technology Innovation as a Principal Catalysts for healthcare sector 1 Dr B Venkatachalam, Professor & Director, Sushruti College of Management, Bangalore. 2 Vijaya Bhaskar, Assistant professor, East West College of Management, Bangalore. Abstract The Indian healthcare industry which has been witnessing a significant level of growth is much influenced by the advances in medical technology. In fact, medical technology is driving the growth wheel for India. Health IT is going to shape the health delivery process globally. Health IT can start as simply as taking a phone call to a doctor, up to building a seamlessly integrated healthcare workflow. On the one hand, IT functions as an enabler in delivering faster and more accurate medical information to end users and at the same time reducing the manual labour-intensive process. Health insurance companies should come together to work jointly with health care providers. This will ensure uniformity and transparency in treatment and outcomes, costs and will help product design immense. Technology like data mining helps the Insurance companies to store the data of its customers and helps in customers services management. The study focus on, the innovation in the technology in order to make health care or medical products work in India, one has to pay attention to three main factors. These are cost, quality and access, also known as the three A s-accessibility, Affordability and Availability. Keywords: 3 A s, Accessibility, Affordability and Availability, innovation 1

2 Introduction Healthcare innovation can be defined as the introduction of a new concept, idea, service, process, or product aimed at improving treatment, diagnosis, education, outreach, prevention and research, and with the long term goals of improving quality, safety, outcomes, efficiency and costs. Financial and technological innovations are bound together and evolve together, suggesting that financial innovation is essential for improving the wealth of nations. As described by Adam Smith, the very essence of economic growth involves increased specialization and the use of more sophisticated technologies. The increased complexity makes it more difficult for the existing financial system to evaluate new enterprises or manage their novel risks. Thus, economic progress itself makes any existing financial system obsolete. Without a commensurate modernization of the financial system, the quality of financial services falls, slowing economic growth. Health insurers are entering a new world where individuals, not groups, are the decision makers. Many insurers are ignoring the transformation of their industry and the opportunities and challenges it presents. India is at the forefront as an emerging market for adapting innovative technologies in healthcare. Infrastructure, geography, market segmentation and economy are key variants that provide the drive. People with abundant technical skills, passion to do something new and the large talent pool facilitate innovation. The latest has been several startups, domain experts and system engineering companies working on disruptive innovations that will drive older technologies obsolete replacing with value added newer concepts and engineered products that will change the delivery of the healthcare system. Objective of the study: To understand the innovations in technology in healthcare sector by using Incremental or Breakthrough model. Building a comprehensive and sustainable health insurance through data repository encouraging innovation around products, channels and usage of technology. Understanding the effort by all the stakeholders of the health Insurance industry to collaborate and pave the road ahead for the Indian health insurance industry. 2

3 Methodology: It is purely a conceptual research, the data is purely secondary, source of information from Hospitals, insurance companies and IRDA Journals and web sites, Insurance books, and some of the information has been created by the researcher as primary source. Statement of the problem: Increasing awareness is critical for increasing health insurance penetration. All the stakeholders including Insurance companies, Healthcare providers, Regulator, Government, Industry bodies, TPAs must come together to increase awareness of Health Insurance in India. The study is focusing on the technology and its impact on the healthcare industry. The main stakeholders of the health care industry are (Table No.1) Revenues from the healthcare sector account for 5.2 per cent of the GDP, making it the third largest growth segment in India. The Indian health insurance business is fast growing at 50 per cent and is projected to grow to $ six billion by A recent study has predicted per cent growth for the Indian medical equipment market and estimated market size to be about $ five billion by 2012 The key drivers are as below: Rising health awareness Shift to lifestyle related diseases Increasing government expenditure on healthcare sector Rise of health insurance sector 3

4 Private sector companies owning and managing hospitals Growth in medical tourism Cost-effective surgical services Health plan can involve consumers in the service delivery process by offering low-cost, highdeductible insurance, which can give members greater control over their personal health care spending. Or a health plan (or service provider) can focus on becoming more user-friendly. Patients, after all, are like other consumers. They want not only a good product quality care at a good price-but also ease of use. The process of innovation can take two forms Incremental or Breakthrough. (table 2) Breakthrough innovation: It is generally less frequent, disruptive and more strategic with high revenue potential and initiated at organization level with close involvement of the top management. Breakthrough strategy enables creation of growth strategies, new product categories, services or business models that change the game and generate significant new value customers and the corporation. Breakthrough innovations are often managed as one-off large projects in the organizations. 4

5 Incremental Innovation: It involves successfully utilizing a new technology, undertaking small process improvements or launching product variants, which bring incremental improvement. Incremental innovation has relatively low to medium impact on the revenues or the expenses incurred by the low to medium impact on the revenues or the expenses incurred by the organization Incremental innovation is often managed through imbibing idea generation, selection, conversion and diffusion steps in the regular responsibilities of the functional leaders of the organization. Incremental innovation is not likely to cost a lot compared to existing cost structures of players, as it involves reengineering existing business and operating model to deliver better and is easier to implement. As a transaction-intensive industry, health insurance is expected to continue to, benefit from the efficiencies that technology brings to traditionally paper-driven processes. But the industry is at a crossroads: It not only must improve existing processes, it must also develop new processes and capabilities to meet new customer demands. There are various touchpoints where technology can help create and monitor process in a much more efficient manner. Innovation Levers in the Data and Information Exchange: Building a comprehensive and sustainable data repository and information exchange mechanisms is critical for building a robust health insurance industry in India. The comprehensive database could help in development of new products, analyzing existing and emerging trends by promoting new research testing of new or alternative hypothesis methods of analysis. Some of the initiative as a suggestion to the stakeholders which is considered as important is (shown in Table 4.) Initiative Stakeholders Suggestion and recommendations made Standardized templates Develop standard templates for various types of data collection such as claims data, disease pattern data, the most likely treatment recommended for each Regulator conditions, insured consumer profile, claim declined so as to reduce frauds (with reasons- recommendations so that it will not get repeated) 5

6 Insurance companies Government Regulator Health Care providers Insurance companies Assist the regulator in developing standard templates for data sharing Data sharing & monitoring i. Support IRDA in building comprehensive data repository and information exchange mechanism ii. Utilize the health information in the data base to provide healthcares for all the individuals. iii. Encourage participation of data from other entities like ESIS, etc in the data repository. iv.encourage participation of healthcare providers to share data. Encourage the formation of the Insurance bureau like credit bureau as data repository in consultation with the Insurance Industry group. 2. since the portability has been introduced mandatory sharing of data by insurance companies and TPA's is necessary. 3. Developing specific database capturing insurance frauds in consultation with the industry group.4.provide the data pertaining to the consumers and various stakeholders in the public domain.5. Assist development of morbidity table as mortality table is available in life insurance people. They should support on diseases patterns and standardization of ICD codes, and conditions relating to each disease patterns for innovation of new product ideas. Co-operate in sharing the data at regular intervals with regulatory authority Co-operation with the regulator in building and sharing the data at regular intervals. Innovation levers in the field of Technology: (shown in table 5) As a transaction-intensive industry, health insurance is expected to continue to benefit from the efficiencies that technology brings to traditionally paper-driven processes. But the industry is at a crossroads: It not only must improve existing processes, it must also develop new processes and capabilities to meet new customer demands. There are various touchpoints where technology can help create and monitor processes in a much more efficient manner. Some of the key initiatives and the action steps for the various stakeholders include: 6

7 Initiatives Key Stakeholders Suggestions to the stakeholders Sales& marketing Fraud management Customer Service Insurance Companies Health care providers Insurance and TPA's companies Healthcare providers Insurance companies & TPA's 1. Explore the use of technological advancement like wireless technology so as to reach out consumers in remote locations.2. Investment in data mining capabilities.3. Encourage participation of the data from other entities like ESIS, other schemes as data repository.4. Encourage participation from healthcare providers to share data. 5. Introduction of health cares for all the individuals. Invest in technology and telemedicine and modern technology to ensure availability of quality health care in remote locations 1. Integrate medical records maintained by health care providers with internal systems.2.maintain data mining on claim history with employers and health insurance companies and health care providers as centralized data for an individual claimant to keep track of fraudulent claims.3.investor anti fraud software or detector can reduce the frauds. Computerize the medical record, and should be centralized so that it can be utilized at any point of time when the individual suffers from the ailment.2. Integrate patients medical record with the TPA's and Insurance companies software with all the Insurance Companies and TPA's because of portability option. 1. Integrate medical records maintained by health care providers with internal systems.2.maintain data mining on claim history with employers and health insurance companies and health care providers as centralized data for an individual claimant to keep 7

8 Disease Management Insurance Companies 1. Create customer friendly portal with information on Health conditions and treatments available and costs to allow customers to make information decivsions.2. Use predictive modeling software to identify members with chronic conditions and have programs to educate them on improving their health well being Conclusion: Innovation offers Indian health insurers an important way to enlarge their customer base and exploit growth opportunities profitably. However, in order to realize this potential, Indian health insurers need to rethink their approach toward s product innovation. They will need to transform their current operational and organizational structures to encourage innovation. Companies that are prepared to make this move will seize first-mover advantage as they accelerate towards the ultimate goal of high performance. References: 1. Accenture- health insurance product innovation. An overview Accreditation of hospitals: An Overview : 2. Dr. Garima Chandra, Express Healthcare Management"Emerging Market Report: Health in Intelligence Unit Commissioned by India 2007." Phillips 3. Forrester Research- innovation in health insurance and customer experienceforeign Investments in Hospitals in India: Status and Implications, WHO India.Gary Ahlquist, 4. David Knott, and Philip Lathrop, Prescription for Change, s+b, Fall 2005: Why consumer-directed health plans are the last chance to avoid a government-controlled monopoly. 5. Joe Flower, Five-Star Hospitals, s+b, Spring 2006: How some hospitals are thriving by taking a consumer-centric approach to care. 6. Michael E. Porter and Elizabeth Olmsted Teisberg, Redefining Health Care: Creating Value-Based Competition on Results (Harvard Business School Press, 2006): Analysis of the U.S. health-care system, with suggestions for curing its ills. 7. IRDA journals from 2007 to 2013.IC -27, Health Insurance Insurance Institute of India.Industry Discussions, KPMG Analysis. 8. Innovating Around India's Health Care Challenges: India;Knowledge@Wharton,Published :July 29, 2010 in India Knowledge@Wharton. 8