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General Studies 2 >> Governance

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1. Context:
The Health Ministry along with the Insurance Regulatory and Development Authority of India (IRDAI) are working on measures aimed at allowing patients to access quality healthcare swiftly and with reduced out-of-pocket expenditure. The Ministry and IRDAI are launching the National Health Claim Exchange (NHCX), a digital platform which will bring together insurance companies, healthcare sector service providers and government insurance scheme administrators. 
2. How is the NHCX expected to work? 
  • The NHCX will function as a conduit for sharing claims-related information among various participants in the healthcare and health insurance sectors.
  • The integration with NHCX is anticipated to facilitate seamless interoperability in health claims processing, boosting efficiency and transparency in the insurance sector and benefiting both policyholders and patients, according to the Health Ministry.
  • When asked if the system will cater to the dynamic and diverse healthcare system in India, S. Prakash, MD & CEO designate of Galaxy Health and Allied Insurance Company Limited, mentioned that the healthcare environment is evolving to meet the IRDAI’s goal of 'Insurance for All by 2047'.
  • He stated, “The insurance industry is ready to support this system's implementation by enabling efficient interactions between hospitals and insurers, creating a smooth, paperless, and secure contractual framework.
  • As a centralized hub for all health claims, the NHCX will greatly reduce the administrative load on hospitals, which currently have to navigate multiple portals for different insurers.” He added that twelve insurance companies and one Third Party Administrator (TPA) have already completed the NHCX integration.
3. What about cashless claims?
  • A deadline has been established for the processing of cashless insurance claims. The insurance authority has mandated that all such claims must be processed within three hours of receiving the discharge authorization from the hospital.
  • The insurance regulator has given providers until July 31 to implement the necessary systems and processes to comply with this new directive. 
4. What are some other incentives on offer? 
  • In a bid to promote the uptake of digital health transactions and the digitization of patient health records nationwide, the National Health Authority introduced financial incentives through the Digital Health Incentive Scheme (DHIS) starting January 2023.
  • As per a note from the Health Ministry, hospitals are eligible to receive financial incentives under the DHIS for every insurance claim transaction made through NHCX. The incentives amount to ₹500 per claim or 10% of the claim amount, whichever is lower.
5. Why is NHCX being brought in? 
  • A study titled "Health Insurance Coverage in India: Insights for National Health Protection Scheme" highlights the significance of health insurance as a policy strategy to furnish healthcare services and alleviate the heavy burden of out-of-pocket expenditure on individuals.
  • It emphasizes that hospitalization cases are most prevalent across India among those insured through private purchases (54.4 per 1,00,000 persons), with urban areas seeing the highest instances among those covered by government-funded schemes (60.4 cases per 1,00,000 persons). Conversely, rural areas show significantly higher rates of inpatient cases among those with private insurance (73.5 cases per 1,00,000 persons). Additionally, urban areas generally experience higher inpatient cases compared to rural regions.
  • Advocating for the NHCX, the Health Ministry asserts that the platform will facilitate the standardization and interoperability of health claims, ensuring a seamless exchange of data, documents, and images between payers (insurance companies/TPAs/government scheme administrators) and providers (hospitals/labs/polyclinics).
  • Industry experts also suggest that the platform, by presenting data uniformly and centrally validating claims data, could introduce a more standardized approach to healthcare pricing.
6. What are the challenges?
  • Health insurance constitutes approximately 29% of the total general insurance premium income in India. According to Dr. Prakash, the primary challenge in health insurance lies in enhancing the relationship between hospitals and insurance companies.
  • He emphasizes that the transition to digitization necessitates active participation from both parties, requiring upgrades to existing IT systems and enhanced workforce training.
  • "Challenges such as discharge delays and communication gaps between hospitals and insurers further complicate the situation," Dr. Prakash adds. "Establishing trust among policyholders depends on delivering efficient services. The NHCX portal aims to streamline the claims process by integrating all stakeholders onto a single platform, thereby reducing claim processing times and standardizing procedures."
  • "While concerns such as data breaches are being effectively addressed, the NHCX continues to offer ongoing benefits for all parties involved, facilitating smoother operations within the healthcare sector," he concludes.
For Prelims: National Health Policy, Non-Communicable Diseases, Economic Survey, GDP
For Mains: 
1. Critically examine the current level of government health expenditure in India compared to other countries. Discuss the challenges in making direct comparisons and suggest potential solutions to improve health expenditure in India. (250 Words)
2. How can India leverage technology and innovation to enhance health insurance accessibility, affordability, and customer experience in the health insurance sector? (250 Words)
3. Discuss the challenges faced in delivering effective primary healthcare services across the country, particularly in rural areas. Suggest policy measures to improve accessibility, quality, and manpower in primary healthcare facilities. (250 Words)
Previous Year Questions
1. As per Health Policy, 2017 approved by the Union Cabinet recently, what was the expected amount of public health expenditure as a percentage of GDP? (APPSC Panchayat Secretary 2016)
A. 5.5%        B. 4.5%        C.  3.5%      D.  2.5%
2. Brominated flame retardants are used in many household products like mattresses and upholstery. Why is there some concern about their use? (UPSC 2014)
1. They are highly resistant to degradation in the environment.
2. They are able to accumulate in humans and animals.

Select the correct answer using the code given below:

(a) 1 only       (b) 2 only           (c) Both 1 and 2         (d) Neither 1 nor 2

Answers: 1-D, 2-C

Source: The Hindu

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