Dubai: UAE residents suddenly finding they can no longer get consultation or treatment at their regular hospitals or clinics should start looking at the fine print in their insurance policies.
In group policies, insurers are cutting down on the number of prescribed healthcare operators - and their facilities - the insured will have access to. This applies to all basic and basic-plus insurance policies as insurers try to keep the cost of claims down. As of now, only those holding a comprehensive health insurance plan have the freedom to choose the healthcare provider they want to consult.
While some form of restrictions on choosing a healthcare facility was always there, this year it has become even more acute, according to hospital and clinic operators. Even established businesses in this space are getting hit by insurers calling the shots.
But M. Rajendran, Managing Director at the brokerage consultancy Al Futtaim Willis, says this is not an issue created by insurers alone. With group coverage, “Everything depends on what the client – the employer – seeks [as part of the annual policy]. At times, these clients are forced to take cover on a ‘restricted basis’ in cases where their medical claims experience is not good.
“And then, they do not want to pay increased premium costs due to adverse loss ratios.”
Shared sentiment on costs
Rajendran’s views are widely shared within the insurance industry. After COVID-19 struck, the impact on a great majority of UAE businesses has cut deep. So, when their annual group cover policies came up for renewals, they have tried to bring down the costs as much as possible. First, a lot of the benefits that the employees could access under the policies were removed, and then came the ‘network coverage’, which means they could only go to select hospitals or clinics for their treatment needs. (Most employers had introduced co-payment into their group policies in the last three years, which means an employee has to shell out 10-20 per cent of the bill on each visit or buying medicines at the pharmacy.)
A reduced network cover will help “If the client wants to get cover at a reasonable cost in view of increasing claims ratios,” said Rajendran.
COVID-19 and thereafter
The period from March last year has been about contrasts. In the six to eight months when the entire focus was on tackling COVID-19’s spread, medical claims in the UAE dropped quite a bit after residents cut down on all non-essential visits to healthcare facilities. The same happened with elective procedures.
But once the virus spread was brought down, the claims numbers have started to rise, and that would have brought concerns to insurers – and employers.
Constant concern
Privately-owned healthcare operators are quite troubled by these trends, where they feel the insurers are dictating all the terms. Not just new facilities, even established names are feeling the heat.
“More corporates are opting for cheaper insurance options with small healthcare networks for their employees to adjust to the drastic deficit in revenue for their business in the last couple of years,” said a top official at a leading hospital in Dubai. “We see a major share of what should have been our business go to the competition. This has heavily affected our market share – but we do not want to compromise on the quality of our service and care to the patients.”
There will not be easy solutions in this particular tug of war. The pandemic has only distorted further the dynamics of the healthcare-insurance relationship.
As Dr. Azad Moopen, Chairman and Managing Director of Aster DM Healthcare, said in a recent interview: “Cost inflation in the medical field is running high – and yet the insurers insist on healthcare providers maintaining the same tariffs from the past. That can never be the answer to keep insures’ claims down. The authorities need to look into this.”
