Healthcare Cost

More and more hospitals are opening up across all cities and towns in India. The good news is that it increasingly provides access to medical facilities for a higher percentage of our population. However the cost of availing these services have increased manifold which is covered either by insurance policies or personal savings. According to NSSO (National Sample Survey Organization), escalating medical costs are pushing more people into indebtedness across all income groups. In India, the government finances only 6% of the medical costs, while a whopping 75% comes from the individual's personal savings. In contrast, the Brazilian government takes up 48% of the cost and an individual shells out a far lesser 45%.

How much does it cost?
Broadly the medical conditions fall into four groups:

• Lifestyle diseases - Diabetis, Cholestrol, respiratory, internal medicine
• Geriatric conditions - Eye, ear, Ortho & Neurological
• Unknown/new conditions - Cancer, Infections (antibiotic resistant ones)
• Non-life threatening conditions - Homecare, eldercare and daily medications

Per recent studies, lifestyle diseases seem to be in a significant upturn in India very similar to the developed nations. This category requires Rs.2-8Lacs per hospitalization procedure. Geriatric conditions could cost anywhere between Rs.2-10Lacs depending on the special needs of the elderly. The unknown conditions are more prevalant today with costs going up as high as Rs.50Lacs. Lastly the non-life threatening conditions cost about Rs.20k-Rs.2Lacs p.a.

Whom do you cover?
For people in organized sector (government and private enterprises), it is usual for the employer to cover the medical and hospitalization expenses of the employee and his/her family. In some companies, parents and parents-in-law are also covered. You may buy additional cover from insurers directly for you and your family with options to include spouse, children and parents. However, in practice, most of us are obliged to cover our extended families including siblings, grand parents, parents-in-law, siblings-in-law etc. Although you may not be able to directly purchase a health insurance (HI) policy for them, you may encourage your extended family to take up a HI policy and perhaps assist to pay the premiums. In this way your own personal savings may not get depleted in case of incuring high medical costs in future.

How do you plan? 

Following some simple rules could help you plan and be well prepared for any contingencies.  

1. Consulting a financial planner could help you arrive at an adequate amount of cover required so that you are not over or under-covered for your hospitalization needs.
2. Most claims do not cover 100% of your expenses, so set aside 20-30% in a fixed deposit to take care of the non-claimable part
3. Make sure the FD is in a joint holding mode with your spouse and inform your spouse about its whereabouts
4. Ensure all of your dependents are covered through a corporate or private medi-claim
5. Even if you are fit, a health insurance helps in case of hospitalization due to accident
6. Do not fail to take travel insurance during overseas travel, especially for the elderly
7. Think well and set aside a maximum amount that you are willing to spend for any medical condition whatsoever it may be - this is to ensure that emotions do not deplete your reserves set aside to meet other important life goals

Super-specialty hospitals are not necessarily super special - they may have the latest equipment, but remember it is always the experienced professional that would be able to save a patient, not the equipment. Most not-so-latest equipments can well do the job of the latest imported equipments. Lastly, it helps to keep oneself updated with the first hand hospital experiences from family and friends (not the stories told in media/TV) - in this way you could respond better to situations not just from a cost perspective but most importantly from a medical care perspective!!