Health insurance still needs fine-tuning

The change in Daman's role in the health insurance industry was an improvement, but there is room for further refinement

Dr Michael Bitzer, CEO of Daman National Health Care Company sits for a portrait in his office. Ryan Carter / The National

ABU DHABI // When Daman, the nation's largest health insurer, announced in January 2009 it was abandoning its monopoly on direct billing at public hospitals and clinics, there was a widespread anticipation that the resulting competition would benefit all.

And that has proven to be the case, but the provision of good, accessible and affordable health insurance still has some wrinkles that must be ironed out, doctors, insurance providers and health regulators agree.

"The emirate's introduction of mandatory health care for all has been a great example of an outstanding job," said Carl Sardegna, the chief executive of Green Crescent Insurance Company. "It set the basis for a sound healthcare system and a minimum level of benefits which is very good. [And the change has] encouraged competition."

But naturally, he said, problems and challenges have cropped up.

Very low premiums are one example."Some providers are pricing irrationally in order to gain market share. But this is a short-term problem that will not … continue once they start seeing their losses," he said.

Others companies quote premiums that are well above the price range of the average individual.

Dr Michael Bitzer, the chief executive of Daman, cited rising cost per member as a challenge due to both medical inflation and enhanced services and benefits. "We try and take different measures to ensure that this increase in cost is kept to a minimum," Dr Bitzer said.

Health insurance is meant to provide affordable care, through the financial stability of providers and their ability to fund the latest technologies and the like, he said.

The competition in the market that resulted from Daman's voluntary step-down enabled consumers to choose an insurer that can meet their needs, he said.

The Health Authority-Abu Dhabi (Haad) actively monitors the market, to make sure that company-set premiums and reimbursement prices are sustainable, said Dr Finn Goldner, the director of health system financing at Haad.

"For insurance providers the key challenge is getting prices right and investing in real, intelligent conversation with their clients to see what people are willing to pay," he said.

Although there are roughly 30 insurance companies in the country, only Daman and Green Crescent - established in 2008 and specialising in policies for companies with 10 or more employees - focus solely on health insurance.

"This is an important point," said Mr Sardegna. Managing property insurance, for example, is very different from health; the former deals with relatively few transactions for relatively large amounts of money, while the latter is concerned with many transactions of relatively small amounts. "The level of service required is substantially different ... You have to be able to devote the resources," he said.

The most important of those resources, Mr Sardegna said, is technology to provide data collection and analysis. "There is an electronic database now in Abu Dhabi that will soon be implemented in Dubai, which will have a single platform for the receipt, storage and dissemination of data from insurance claims," he said.

Dr Goldner said "Health insurance in Abu Dhabi is a great success story; everybody has insurance, everybody is covered. In rare cases, Haad takes a pragmatic approach to deal with exceptions."

There are challenges, he said, but these are being addressed by monitoring and making sure that quality indicators of care are being delivered to those who are insured.

"We now need to find other ways of incentivising people to improve their health - not only the providers, but the individuals," he said.