In 2013, when Satish Gidugu joined Medi Assist as chief technical officer, Indian hospitals were still sending discharge and admission details to third-party insurance administrators by fax! Today, both the global and Indian landscapes have evolved significantly in terms of technology, notes Gidugu, who is now the chief executive officer of Medi Assist. However, he acknowledges that two fundamental issues in India's health insurance sector persist―under-penetration and inadequate coverage.
Third-party administrator (TPA) firms like Medi Assist act as intermediaries between insurance companies and policyholders. TPAs were allowed in the Indian insurance industry in 2001 by the Insurance Regulatory and Development Authority (IRDA). Licensed in 2002, Medi Assist was one of the early entrants.
“Our mandate is to act as an extended arm of insurance companies, focusing on network building, enabling cashless transactions, managing claims, fraud prevention, customer service and policyholder onboarding―essentially overseeing the entire customer experience and transaction management,” explains Gidugu, while adding that Medi Assist operates across all three segments of health insurance―group insurance, retail insurance and government health schemes. The firm claims to be India’s largest TPA, and the number of claims intimated to Medi Assist was around 7.63 million in FY24.
Nevertheless, Gidugu remains unsatisfied with how health insurance is managed. “Health insurance here primarily covers catastrophic care, focusing on major medical expenses that often require at least 24 hours of hospitalisation for claims to be valid, except for certain daycare procedures,” he says. “The real challenge is shifting the focus from hospitalisation to preventive care, creating incentives for insurers and health care providers to keep people healthy and out of hospitals.”
He stresses the need for a segmented approach to improve insurance penetration and coverage. In India, the affluent can afford private insurance, while those at the bottom of the pyramid rely on government-supported schemes. However, he highlights a “missing middle”―a group that does not qualify for government benefits but struggles to afford private insurance. “This segment, which includes informal sector workers and those unaware of insurance benefits, has an alarmingly low coverage rate of just 25 per cent,” he says.
Satish Gidugu
The real challenge, Gidugu emphasises, lies in expanding insurance adoption within the missing middle, as this group represents a significant share of India's growing workforce. “A one-size-fits-all strategy will not suffice, given India's vast population and economic diversity,” he says. “Instead, a multi-pronged approach is necessary, including direct consumer purchases, employer-sponsored insurance and government-supported programmes.”
Gidugu strongly advocates a shift in approach from reactive to proactive―not just in insurance but across the health care system. He is a proponent of the philosophy that preventive health care, fitness and disease management will reduce the burden on hospitals and insurers alike. “A healthier population benefits not just individuals but also the insurance sector,” he says.
Over two decades, the health care sector in India has rapidly evolved with advancements like robotic surgeries, high-resolution CTs and MRIs, non-invasive procedures and laparoscopy. “While these technologies improve treatment outcomes, they also increase short-term costs, making it crucial for insurance to keep pace with medical advancements,” says Gidugu. “However, traditional insurance models struggle to match the rapid technological growth, contributing to higher out-of-pocket expenses for patients. And, when it comes to technology, we are still significantly lagging in areas like data exchange, standardised formats, service visibility and speed―both for providers and insurers.”
Gidugu considers the lack of standardisation in billing formats or discharge summaries a major issue in this regard. “For instance, if you visit two different hospitals in Kochi for the same treatment and length of stay, the bills will not only differ in cost but also in how the line items (each individual service, procedure or supply listed separately with its corresponding cost) are structured. This lack of uniformity extends to pharmacy billing as well,” he says. “At its core, the industry lacks a standardised system for exchanging information, which remains a fundamental challenge.”
The interoperability between health care providers and insurers also remains a challenge in India. Without clean, structured data, it is challenging to assess what treatments should be covered, what is lacking in existing insurance policies, and how to improve them. Recognising the revolution that AI can bring to the table, Gidugu’s team has been focusing on digitising and standardising medical data, as for AI-driven solutions, data is the first requirement. “Over the past three to four years, every line item in bills and claims has been digitised, creating a massive data repository. And, a dedicated data science and machine learning team was brought in to unlock actionable insights,” he says, while adding that AI can do magic in terms of enhancing policyholder experience and faster hospital discharge. “Traditionally, policyholder satisfaction and insurer efficiency have been seen as opposing priorities―enhancing one often came at the expense of the other. However, AI is changing this dynamic, particularly in expediting hospital discharges.”
Long discharge wait times and delays in cashless transactions are common frustrations. “Ideally, this should be a B2B process between insurers and hospitals, but patients end up waiting as hospitals determine out-of-pocket expenses before finalising the bill. To solve this, we developed predictive algorithms over the past 18 months, leveraging our data repositories,” says Gidugu. “These models accurately estimate final bills, itemised costs, and patient contributions within Rs500. As a result, an average of 7,000 patients per month can leave the hospital immediately upon discharge, before the bill is generated. They settle their portion and exit, and the remaining billing continues as a B2B transaction. Currently, this covers only 3 per cent of cases, but we anticipate wider adoption as algorithms improve and insurers prioritise customer experience.”
Fraud detection and claim optimisation are other segments in which AI is making a revolution in the insurance domain. AI now detects fraud, waste and abuse claims with greater accuracy, says Gidugu. He also predicts that with continuous algorithm improvements and industry-wide support, AI is set to enhance both policyholder experience and insurer efficiency, creating a more seamless, fair, and efficient health care insurance ecosystem.