Narayana Hrudayalaya launched its new 'Aditi' Insurance Scheme: Promises and Challenges of the Managed Care Model
MAS Team | 10 July 2024
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Narayana Hrudayalaya (NHL), the Bengaluru-based hospital chain, has recently introduced an insurance scheme named Aditi, aiming to revolutionize healthcare accessibility in India. This innovative managed care model offers substantial coverage at a competitive premium, sparking both interest and debate within the healthcare and insurance sectors.
 
The Aditi scheme, launched under Narayana Health Insurance, provides a family floater policy with an impressive Rs1 crore cover for surgeries and Rs5 lakh for medical treatments at NHL network hospitals. The annual premium is set at a Rs10,000 for a family of two adults and up to four children which includes self, spouse, dependent children (aged 3 months to 25 years) , making it an attractive option for middle-class households. Initially rolled out in Mysuru, Chamraj Nagar, Coorg, Mandya and Hassan the scheme is being seen as a potential game-changer in the Indian healthcare landscape.
 
NHL's adoption of the managed care model follows successful implementations globally, particularly in the United States, where hospital chains have demonstrated its viability. This approach aims to provide subsidized healthcare to subscribers, addressing some of the challenges faced by conventional health insurance schemes with open hospital networks.
 
Aditi offers several advantages, including immediate coverage without waiting periods, free annual comprehensive health checkups, and coverage for consumables (except robotic surgeries). It also covers pre-hospitalization expenses for 60 days and post-hospitalization expenses for 90 days, along with living organ donor expenses. The policy extends to two adults and up to four children, with the age range for dependent children being 3 months to 25 years.
 
However, despite its attractive features, the scheme has faced criticism from industry experts. The primary concerns revolve around the limitations of the coverage. While the Rs1 crore cover for surgeries is impressive, the Rs5 lakh limit for medical management could be viewed as inadequate. Additionally, the restricted network of hospitals, limited to NHL facilities, is seen as a significant drawback
 
Critics argue that the coverage is too narrow in terms of both hospitals and medical procedures. The plan only covers listed daycare treatments and not all procedures, and the coverage is restricted to the general ward. If a patient opts for special rooms, the insurance company will pay on a pro-rata basis applicable to the general ward. There's also a daily deductible of Rs2,000 per day on all admissible claims for non-surgery or non-surgical procedures. There is a deductible of Rs2,000 per day for surgery and surgical procedures in its plan 1 which can be avoided by paying extra premium in plan 2. 
 
Scheme Details
 
Co-pay in health insurance is a fixed amount you pay for a covered healthcare service, with the insurance company covering the rest.
 
In this example Rs2000 per day is fixed amount co-pay. 
 
There is also a percentage based copay: For example if the total medical expenses were – Rs20,000 and percentage based co pay was 10% : Rs 20,000 (10% of Rs 200,000)
 
Which is better depends on several factors:
1. Total cost of treatment: For expensive procedures, a fixed amount is usually better. For less expensive treatments, a percentage might be lower.
2. Length of stay: With daily fixed amounts, longer stays mean higher costs for you.
3. Predictability: Fixed amounts are more predictable for budgeting.
4. Overall health: If you expect frequent medical care, fixed amounts might be better for multiple visits.
5. Policy limits: Some policies cap the total out-of-pocket expenses.
 
Moreover, while there is no co-payment within the NHL network, a 10% co-payment applies if the insured person seeks treatment at a non-network hospital without informing Narayana within the stipulated time. These restrictions have led some to question whether the product truly fits the 'affordable' tag it aims for.
 
Aditi scheme is seen as a step towards addressing the healthcare needs of India's middle class. It targets those who may not be eligible for government schemes like Ayushman Bharat but find private healthcare insurance premiums prohibitively expensive. The scheme's potential to provide affordable access to quality healthcare is significant, especially in a country with low health insurance penetration.
 
NHL's initiative also highlights the need for diverse healthcare delivery models in India to cater to different income groups. As a mid-sized healthcare chain with a network of 21 hospitals across India, NHL can gradually expand this model nationally, leveraging its integrated network to benefit middle-class households and local businesses.
 
However, the success of this model will depend on NHL's ability to maintain a strong governance system. The inherent conflict of interest in a vertically integrated healthcare player providing both insurance and treatment necessitates robust checks and balances to ensure quality care is not compromised in the pursuit of cost control.
 
As the Aditi scheme continues to evolve and expand beyond its initial rollout in select districts of Karnataka, it represents an innovative approach to tackling India's healthcare challenges and could pave the way for more such initiatives in the future.