HEALTH WIN­DOW LEFT AJAR FOR QATARI IN­SUR­ERS

A de­ci­sion to de­fer ex­tend­ing a com­pre­hen­sive state health in­sur­ance scheme to the ex­pa­tri­ate com­mu­nity in Qatar means that pri­vate in­sur­ance com­pa­nies will be able to tap into the seg­ment for at least an­other 18 months.

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Un­der the new health scheme, launched in Au­gust 2013, cov­er­age was to be ex­tended over five stages. In Fe­bru­ary, Dr Faleh Mo­hamed Hus­sain Ali, the act­ing CEO of the Na­tional Health In­sur­ance Com­pany (NHIC), an­nounced that com­pre­hen­sive com­pul­sory med­i­cal in­sur­ance for ex­pa­tri­ates – one of the fi­nal stages ex­pected to be in place this year – would not be im­ple­mented un­til late 2016.

De­spite the short-term re­prieve for pri­vate sec­tor com­pa­nies, the coun­try's un­der­writ­ers will need to find al­ter­na­tive rev­enue streams in the long term to main­tain pre­mium growth in the wake of the full im­ple­men­ta­tion of the scheme.

Seha roll­out

The Na­tional Health In­sur­ance Scheme, known as Seha, has been rolled out over the past few years. The first stage fo­cused on women's health ser­vices, and other stages pro­gres­sively in­creased cov­er­age to all Qatari na­tion­als. The last two stages, cov­er­ing white-col­lar and blue-col­lar ex­pa­tri­ates, were to be rolled out in early and mid-2015, re­spec­tively.

Cur­rently, the pre­mi­ums for Qatari na­tion­als are paid by the gov­ern­ment. How­ever, for ex­pa­tri­ates who make up the ma­jor­ity of the coun­try's 2.3 mil­lion pop­u­la­tion, the cost of their cov­er­age is to be met by their em­ployer, at rates set by the NHIC and paid to the in­surer.

How­ever, a de­lay to the full im­ple­men­ta­tion of the pro­gramme is in part due to the sharp rise in de­mand on Qatar's health ser­vices stem­ming from the pro­gres­sive in­tro­duc­tion of the scheme. With com­pre­hen­sive free health­care now ex­tended to in­clude more than 190 pri­vate med­i­cal fa­cil­i­ties that ac­cept Seha in­sur­ance, along with the ex­ist­ing state cen­tres that pre­vi­ously of­fered cost-free ser­vices to Qatari na­tion­als, many hos­pi­tals

“The full im­ple­men­ta­tion of Seha is likely to drain away pre­mi­ums from the pri­vate sec­tor, with Qatari cit­i­zens who had ex­ist­ing health cov­er­age, em­ploy­ers who had poli­cies for their staff and ex­pa­tri­ates who had taken out med­i­cal in­sur­ance, all shift­ing to the state sys­tem.”

and clin­ics are strug­gling to meet de­mands, Dr Ali said.

Tem­po­rary re­lief

For Qatar's in­sur­ers, the de­lay amounts to some­thing of a tem­po­rary re­prieve, al­low­ing them a fur­ther op­por­tu­nity to op­er­ate in the health­care mar­ket.

Un­der the reg­u­la­tions gov­ern­ing the scheme, pri­vate in­sur­ers are only be­ing al­lowed to par­tic­i­pate in the health seg­ment by of­fer­ing ad­di­tional benefits. The NHIC has the sole re­spon­si­bil­ity for is­su­ing the ba­sic health benefits, un­like in some other coun­tries in the re­gion where cov­er­age is car­ried out by pri­vate firms un­der com­pul­sory health in­sur­ance sys­tems.

Ac­cord­ing to in­dus­try ex­perts, op­por­tu­ni­ties for the pri­vate sec­tor un­der the health in­sur­ance pro­gramme will be ex­tremely limited. The full im­ple­men­ta­tion of Seha is likely to drain away pre­mi­ums from the pri­vate sec­tor, with Qatari cit­i­zens who had ex­ist­ing health cov­er­age, em­ploy­ers who had poli­cies for their staff and ex­pa­tri­ates who had taken out med­i­cal in­sur­ance, all shift­ing to the state sys­tem.

The in­creas­ing pro­file of the state in­surer in the mar­ket – which may be con­strued as a com­peti­tor – will weaken the po­si­tion of pri­vate in­sur­ance com­pa­nies, lim­it­ing their po­ten­tial for growth, while also hav­ing a neg­a­tive im­pact on the sec­tor in the longer term, ac­cord­ing to Elias Che­did, the COO and Deputy CEO at SEIB In­sur­ance.

“The NHIC should be com­ple­men­tary to the pri­vate sec­tor in ev­ery sense of the word and not a re­place­ment. Oth­er­wise, it would be dry­ing the mar­ket and sim­ply forc­ing pri­vate health in­sur­ers out,” Che­did told OBG.

“Ul­ti­mately, while you will see benefits in the short term of hav­ing a sin­gle in­surer, in the long term we run the risk of com­pla­cency un­der­pinned by a lack of in­no­va­tion due to lack of com­pe­ti­tion,” he added.

This sen­ti­ment was echoed by Ali Saleh Al Fadala, Se­nior Deputy Group Pres­i­dent and CEO, Qatar In­sur­ance Group. “The Na­tional Health In­sur­ance Com­pany is now aim­ing at pro­hibit­ing all public en­ti­ties in the coun­try from us­ing pri­vate in­sur­ance, vir­tu­ally end­ing any sort of com­pet­i­tive en­vi­ron­ment and re­mov­ing the pri­vate sec­tor. This is a step back­wards in my opin­ion,” he told OBG, adding that costs of the project are al­ready run­ning over bud­get. “Given cur­rent de­clines in oil prices, we doubt the scheme will be able to cover all ex­pa­tri­ate res­i­dents in the coun­try as orig­i­nally in­tended.”

Though op­por­tu­ni­ties will be limited in the ba­sic health­care mar­ket, Qatari in­sur­ers will have the in­cen­tive to tar­get the higher end of the health sec­tor, which could gen­er­ate higher rev­enues per pol­icy. The surge of vis­its to med­i­cal fa­cil­i­ties since the first stages of Seha came into force re­sulted in an equally higher vol­ume of pro­cess­ing and ad­min­is­tra­tive charges, along with pay-outs, which would have kept earn­ings mar­gins tight. Rather than tar­get­ing the mass mar­ket, in­sur­ers could set a pre­mium on pro­vid­ing cov­er­age for higher-end ser­vices

BY OLIVER CORNOCK The au­thor is the Re­gional Edi­tor of Ox­ford Busi­ness Group.

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