Are Indian Pvt health Insurers blocking payouts ?

The Economic Times of May 6,2008 has carried part of the report released by USAID .The contents are ;

INDIAN health insurance is growing by 25% every year, it’s penetration is less than 0.02% of the GDP, yet there is no expertise on the sector, says USAID report.
The report, released on Monday, to study the impact of private life insurance on health coverage in India has said that the focus in India is on controlling claims pay-out by following strategies designed to minimise insured person’s ability to collect claims. “There is excessive emphasis on disqualification because of pre-existing conditions and post-claim underwriting”, it said. No wonder then, that it is one of the largest litigation areas for insurers. The report has suggested a slew of measures to improve the regulatory framework for health insurance.
For the regulator, Insurance Regulatory and Development Authority (IRDA), the report has a separate prescription for health insurance. Separate reserving rules should be considered for the different categories of health insurance, taking into account the short-term versus long-term nature of contracts, whether policies provide indemnity or assured benefits and the loss experience of varying health insurance products.
It has also asked IRDA to promulgate specific regulations for the sector. These include a minimum regulatory definition of pre-existing illness or condition to provide clarity in interpretation spelling out maximum “look-back” and “look-forward” periods. Further regulation is need to prohibit post-claims underwriting, making it mandatory for insurers to offer both group and individual policies among others.
Taking into account medical inflation, the report called for higher public health care spending. Effective primary care and prevention, safe maternity care and chronic disease management should be a part of public and private insurance, it said. “The burden of disease as measured by Disability Adjusted Life-Years could be reduced significantly if both health insurance coverage and publicly provided care included these services,” it said.
The country has a dismal record of even hospitalisation coverage – the basis for health insurance, it said. Quoting a recent census, it said only 1.7% of admissions were reimbursed and the average reimbursement was only Rs 258 (or 3.6% of the average hospitalisation cost of Rs 6,225).
Private insurers’ administrative cost are 40% of total premiums, double the target benchmark of 20%. Policy holders pay higher charges for healthcare services than those without insurance, because the mediclaim product has been modified in ways that make it less a program to control the cost of care and more a reimbursement target for providers.
The report forsees a more dynamic TPA market going forward, where TPAs could partner with insurer organizations. To encourage competition, it is recommended that mutual insurance companies and non-profit companies should be allowed to enter the market. Although IRDA can retain licensing TPAs, parts of regulation of TPAs should gradually come under the contractual relationships that insurers have with TPAs.

Our comments are;
We as an industry lack innovativeness.When an insurance co wants to develop a product they simply see the products of other co’s and try to copy the same.We suggest they should look at products from around the world and then come out with product.