Wellness & Fitness

Claims processing turf battles heat up

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A children’s ward at Kenyatta National Hospital. FILE PHOTO | NMG

Ongoing efforts to harmonise the health sector in terms of operational regulations and standards will see opportunities in new areas. Top among these is in hospital claims processing and settlement, arguably a big headache even for the few existing number of corporate insurance clients. Presently, the private sector penetration is at six percent or thereabouts.

Out of pocket payments still account for more than three quarters of all health services consumed and do not generate as much paper trail as in an insurance dominated payments system.

However, as we move towards insurance based health systems, growing NHIF penetration as well as UHC implementation across counties, out of pocket payments are expected to decline.

Similarly, ongoing medical regulatory and Ministry of Health control of unregulated practice of medicine premises will see fewer enamelled facilities, but mostly operating in a formalised health insurance environment dominated by NHIF.

A sprinkling of private insurers will also exist.

The local medical claims processing market has been dominated for over a decade by market leader, SMART Application Systems. New entrants in the market are however gearing to bite a segment of this chunk.

Notable entrants include Savvanah Informatics, who are riding on the biometric identification space to rival SMART Application Systems.

The front runners in this three-horse- race is completed by digital health payments solutions provider, CarePay, whose mobile based system recently received a big boost through new investments.

As data safety and speed of claims reconciliation become priority areas, the market segment is anticipated to attract foreign partners. Notable also is that venture capital and private equity firms are keen to invest in start-ups in this space to get early bird advantages before exits.

Insuretech as the segment is known has attracted scrutiny from major financial players. The 2019 Annual industry reports from the big four financial advisory firms PwC, KPMG, Deloite and Ernst and Young all offer almost similar conclusions.

The verdict though in all of these reports boils down to digitisation of insurance procecses, approaching the industry from an ecosystem perspective data-wise (in our case the patient, the healthcare provider and the payer or insurer). The objective being seamlessly integrating data towards provision of better insights on the ecosystem.

One of the reports goes further to advocate for outsourcing of the claims processing services to third parties. The idea is that a new way of doing things will perhaps spur efficiency while offering new insights missed by bureaucratic age old insurance systems.