Doctor-turned-insurer has right call

Editorial | Mar 7, 2017
Insurance giant AIA's blunt reminder that it will cover hospitalization costs only for certain more stringent medically necessary conditions is like throwing a stone into a still pond - causing ripples in the traditional relationship among patients, doctors and the insurance industry.

The reminder was prompted by an alarming increase in claims related to simple procedures that can be performed at day-time clinics.

It has been a long-standing triangular relationship that sees the industry meeting its need to promote policy sales, while patients are spared the fear of footing expensive bills, and doctors confidently charge fees for treatments and examinations.

In theory, this should constitute a stable relationship - providing there's no procedural abuse.

But in reality, it can be too idealistic. To meet sales quotas set by managers, insurance agents are under pressure to highlight protection and play down limitations while flogging policies.

Meanwhile, doctors are tempted to inflate bills, knowing that insurers will pay them anyway. As for patients, they don't mind getting examinations they don't really need, knowing the extra costs will be borne by somebody else.

However, the equilibrium can be upset if it's tilted against one or another.

AIA's letter to doctors is such a big rock that it threatens to upset the balance. I wouldn't be the least bit surprised if the idea stemmed from former secretary for food and health York Chow Yat-ngok, who is now AIA's chief medical officer.

When Chow was in government, he wanted to make public health care sustainable by tapping private-sector resources. If medical policies can be cheaper, it would help his successor, Ko Wing-man, achieve what he had failed to complete during his term.

However, what does surprise me in the current row is the readiness of the AIA management to go so far as to become the first one to upset the apple cart - especially since the insurance industry is known for stiff competition, and AIA may lose clients to rivals such as Prudential, Manulife and FWD.

AIA must be seriously concerned about the rise in payouts. At first blush, the Asia Pacific-focused insurer seems barbaric because it shouldn't tighten criteria for paying claims without the consent of the insured, while doctors shouldn't be challenged on their judgment over what's best for patients.

But on a second look, the insurer's case seems to have merit.

Although its fears about the inflationary impact on premiums due to rising medical bills may be only part of the overall picture, the statistics do help reveal something worrisome.

Apart from the extreme claim of HK$180,000 for a gastrointestinal checkup that could have been performed at a day-time surgery center for about HK$10,000, the number of claims for similar checkups jumped 32 percent in 2016, with 90 percent of those cases involving overnight hospital stays.

It's simply surprising there had been so many cases requiring hospitalization, when it's common for such procedures to be carried out at day-time centers in the public sector.

Were they all justified?

Regardless of AIA's motive for issuing the reminder, it's correct for Chow to point out doctors have the dual responsibility of looking after patients and using medical resources properly.

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April 2018