Health insurance reforms must go beyond rates to address the cost of care: Industry experts

Experts cautioned that the NHCX would have to be properly integrated across stakeholders and implemented consistently

India’s planned health insurance overhaul may change the way hospitals, insurers and patients engage, as the government considers uniform treatment fees, a shared insurance framework and broader use of the National Health Claims Exchange (NHCX). Although the goal is to curb soaring medical expenses and boost openness, experts warn that success hinges on tackling both treatment prices and the real cost of providing quality care.

Gurmeet Singh, Vice President and Head of Health Underwriting at IFFCO‑TOKIO General Insurance, believes that uniform treatment fees and a shared claims system are key moves toward a more efficient and affordable health‑insurance market.

Siddhartha Bhattacharya, Secretary General of NATHEALTH, counters that simply fixing prices is insufficient; we must also confront the underlying delivery costs that providers face—such as land, capital, staffing, regulatory burdens, inefficient procurement that breeds fraud, and slow reimbursements from insurers and government programs.

A Positive Move

Singh noted that aligning treatment costs between private and public hospitals could restrain spending on tertiary and super‑specialty services. He called the proposed changes a “welcome step,” especially for lower‑middle‑income families grappling with rising medical bills.

“If uniform fees are applied in both private and government hospitals, overall spending on tertiary and super‑specialty care will stay within acceptable bounds,” he added.

He also endorsed the NHCX, calling a health‑claims exchange “the right path forward.” He explained that a shared platform would enable insurers, hospitals and third‑party administrators to adopt standardized rates and procedures for illnesses, surgeries and hospital admissions.

Nevertheless, Singh warned that the platform must be seamlessly integrated among all stakeholders and applied consistently.

Challenges

Bhattacharya contended that the NHCX could mitigate some of these issues by establishing a shared digital infrastructure for hospitals and insurers.

Singh pointed out that fraud and abuse might represent roughly 5‑10 % of claims, with abuse also encompassing instances where a service’s true cost is inflated in a claim. He added that standardization could trim claim expenses by about 8‑10 %.

“Should we achieve claim‑cost savings, we can lower the annual incurred loss ratio and transfer that advantage to policyholders through reduced premiums,” he said.

Bhattacharya, on the other hand, argued that the discussion must start with the actual cost of delivering healthcare, not just the sticker price of a procedure.

Ensuring Quality Care

He cautioned that setting rates without grasping the economics of healthcare could render quality care financially unviable and hinder the achievement of good clinical outcomes.

“For providers, expenses begin long before a patient walks through the door. Hospitals must also meet numerous regulatory and operational demands, which increase the cost of building and operating facilities,” he noted.

He also flagged delayed payments as a serious obstacle for hospitals, noting that insurers and government programs must accelerate claim settlements—otherwise hospitals keep paying salaries, supplier bills and other running costs while waiting for reimbursement, tying up working capital. “Pay promptly,” he urged, suggesting that claims ought to be cleared within 15 to 30 days instead of stretching to six or twelve months.

Published on August 14, 2026