Medical insurers take up cudgels against health care providers

Set month-end deadline for clinics and hospitals to cut consultancy costs

The relations between UAE’s medical insurers and health care providers are coming under fresh strain, and if not resolved at the earliest, can severely impact the delivery of medical services to citizens.

The latest incident centres around insurers setting an end-of-the-month deadline for some hospital and clinic operators to bring down the cost of consultancy and other treatment costs. This includes one of the UAE’s biggest privatelyowned health care company.

If not, the insurers will stop “extending cover” to these facilities. What this means for residents is pretty clear – they will not be able to visit any of the hospitals and clinics operated by these companies because their insurance policy specifically bars them.

Hospitals and clinics need coverage from as many insurers as possible – this ensures they have a wider base of residents to extend their services.

Negotiations on

According to sources who spoke to Gulf News, negotiations are still going on to try and arrive at some solution conducive to all. Apart from insurers, TPAs (third-party administrators) too are involved in the dispute with health care companies. (TPAs process and pay out claims generated by health care providers on behalf of insurers. They are a vital cog in the medical insurance business.)

“The threat of removing cover is likely intended as a tactic to bring the health care providers to the negotiating table,” said a source at one of the leading insurance brokerage firms in Dubai. “Insurers feel these businesses are over-charging and they want to do something.

“If everyone comes to the negotiating table, the chances of reaching some sort of bargain is higher.”

After Covid-19 struck and health care operators saw a sharp and sudden decline in their nonCovid-19 related consultancies, matters became more dire.

But many in the industry believe this is not the right time to escalate an insurer-health care provider issue. And that it sends wrong signals to the authorities and residents at a time when the business of health care is in constant spotlight because of the pandemic.

Compromised standards

Hospital operators, however, insist it’s not about cutting their rates and reach a “compromise” with insurers.

“We also cannot afford to compromise on overheads for running the hospital with compromised standards,” said Dr Raza Siddiqui, Executive Director, RAK Hospital.

“So, if insurance companies start being tough, this will have disastrous effects on the entire health care ecosystem.

“The health care industry which has come up so well in the region providing international quality health care — not only to local people, but also to medical tourists — will get compromised. And may lead to health care providers shutting down shop simply because they don’t have that much margin to sustain.

“Insurance companies must support the ecosystem for the health care systems to thrive and continue providing quality care.”

In the past, insurers have stopped extending coverage to the odd hospital or clinic over differences related to claims generation and payments.

But when they are targeting leading health care networks, it becomes a different game altogether.