Abuse can undermine healthcare insurance services

Oman’s Capital Market Authority (CMA) has called on insurance industry pundits to help support the development of an effective and efficient healthcare insurance system in the Sultanate that is robust enough to, among other things, combat the potential for leakage and abuse typically blamed for undermining systems elsewhere in the region and around the world.

The appeal was made by CMA Executive President Abdullah bin Salim al Salmi who challenged the distinguished gathering of industry executives and experts, hailing from around the globe, attending the 11th Middle East Healthcare Insurance Conference held in Muscat last week.

Speaking at the Q&A session, Al Salmi said: “Learning from our neighbours, I think we have the opportunity to put in place at the outset the right infrastructure (and criteria) for healthcare insurance regulations in order to avoid the negativity witnessed in other (countries).”

He further added: “As I understand, most of the cost goes towards addressing leakages in the system; thus by reducing leakages through efficiency, we can make the cost of healthcare services (less) inflated as has been the case in other places.”

The CMA Executive President’s comments follow his earlier announcement affirming the government’s decision to introduce mandatory healthcare insurance for expatriates starting from 2018. Putting in place an efficient regulatory framework to support the rollout of compulsory healthcare coverage by private sector employers was imperative, he noted.

Responding to Al Salmi’s observations, Robin Ali, Head of Practice at The Consilient Consultancy, an independent consultancy practice based in Dubai, stressed the importance of deployment of adequate professional staff in the enforcement of healthcare insurance regulations.

“In my experience, it comes down to allocating sufficient resources for enforcement,” the expert said. “As a regulator, you can have a fantastic e-claim system, which will help you scrutinise every single claim that is submitted. And you can use that data to spot the outliers. Those are the physicians, clinics and hospitals that are abusing the system. You can see which physicians need to be spoken to, because they are either recommending too many tests or unnecessary tests. But the problem is if you, as a regulator, do not have the resources to then go and talk to these people, then it doesn’t not matter how much data you have, or the fact that you know who the abusers are. You need to have the physical manpower to enforce.

That is where I see systems in a number of countries that have failed. The law is in place, but enforcement is not, because of lack of resources. This is the key to making sure that we have a system in place which is not subject to abuse or fraud.”

According to the expert, fraud plays a small part in the economic loss suffered by a healthcare insurance system. “The biggest part of the abuse stems from the ignorance of some practitioners. For example, they may not know that there are updated tests that are one-tenth of the price of what they are offering at the moment. There are medical diagnostic companies that have up-to-date technologies and tests that can provide the same result in less time and at less cost. But physicians may not necessarily know that.”

In this regard, Robin Ali stressed the need for all those involved in the healthcare insurance eco-system — including insurers, healthcare service providers, pharmaceutical companies and regulators — to be involved in the process. Also imperative is the choice and role of the regulator, he noted.

“The question is who is the regulator that can bring all of these (parties together). In Oman, the regulator is the CMA, but should the Ministry of Health be involved as well? I think they should. Policy must be decided at the cabinet level, so that people charged with implementing policy should know what their obligations are, and also what their powers are. It’s a far more simple situation in Oman because you don’t have a multiplicity of regulators as in the United Arab Emirates, for example.”