Preferred Provider Organisation for health insurance to expand in 2014

Insurers feel unique identity numbers for hospitals will help expand the network

The preferred provider organisation (PPO) — a type of health insurance arrangement that allows plan participants relative freedom to choose the doctors and hospitals they want to visit — is expected to gain prominence in 2014, with more hospitals entering this sphere. With Insurance Regulatory and Development Authority and Insurance Information Bureau having unique identity numbers of hospitals, insurers feel the process of tying up with hospitals would be speeded up.

According to experts, mounting losses in health insurance due to increased claims outgo is a matter of concern. To address this, public general insurers had begun a mechanism to rationalise health costs through PPO. A policy holder can get cashless treatment at those hospitals which have agreed to a preferential pricing, resulting in lesser outgo towards claims.

In emergency cases, this facility is available even at hospitals which are not part of PPO. The customer is free to choose a hospital of choice which could be outside the PPO. Here, the health policy would provide for reimbursement of these costs.

"Earlier, though PPO was functioning, adequate data about hospitals were not available. Now, with unique numbers being created for the hospitals, more such institutions would become a part of the PPO," said a senior official of an insurance firm.

Some hospitals did not want to be a part of PPO, as they feel the standardised rates are not feasible. But insurers said, in the next few months, when adequate data would be available for what were the exact charges for each medical procedure in different hospitals, they would also join the system.