The Medical Council recently lambasted medical insurance companies for imposing on doctors 'inhumane' contract conditions that are against medical ethics and patients' interests. These conditions include restrictions on return visits, referrals to specialists and clinical laboratories, and dispensing medication for more than five days.
These restrictions are meant to mould the way doctors practise medicine to suit the company's bottom line rather than patients' needs, and are characteristic of an industry whose business model is based on actuarial principles.
I used to work for a medical insurance company as a consultant. One thing I learned is that it's a cutthroat business open to abuse by policy- holders and medical practitioners. It is generally a money-losing business, kept afloat by mainstream insurance businesses or the parent company. To minimise losses, the industry imposes restrictions on certain medical practices, thereby providing a Band-Aid type of remedy instead of radical surgery to the problem of abuse.
There are several disadvantages to this approach. It deprives many patients of full coverage, and requires a large number of assessors to keep track of the nitty-gritty items in the claims to make sure all the restrictions are adhered to - adding to the huge operational cost. Further, it compromises ethical issues, as stated by the Medical Council.
There are various areas of abuse. Many clients obviously had health conditions before they bought expensive insurance packages, then checked themselves into first-class hospital rooms and ran up massive bills. Many serious diseases, such as coronary heart disease, take years to develop; for such illnesses, insurance policies should have a no-claim period of at least 12 months before anyone can claim for treatment.
Those who buy insurance but stay healthy often check themselves into hospital for some vague symptoms and have a complete physical check-up, including a battery of unnecessary laboratory tests costing thousands of dollars. If clients are made to pay part of the cost of any form of treatment, they will think twice before visiting doctors unless it's clearly necessary. No-claim bonuses would also discourage unnecessary hospital visits.
Since many policies do not cover outpatient treatments, clients will drum up some nebulous but 'urgent' symptoms and admit themselves as inpatients, pushing up costs tremendously.