The real issue with insurance claims inflation lies in the insurance industry's inability to manage its value chain.
Be it with hospitals or motor repair workshops, insurance companies seem to have been unable to control these vendors and their costs.
Escalating costs have now been framed as overconsumption, with policyholders bearing the brunt of it ("Policyholders with riders run up higher treatment bills" and "Panel suggests doing away with medical insurance riders"; both published last Friday).
Policyholders are not insurance or medical experts.
They rely heavily on insurance experts to advise them on what products to buy and how to submit claims. They also rely on medical experts to advise them on what treatment they need when they are unwell.
A policyholder can overpurchase and overconsume only based on expert recommendations from insurance and medical professionals.
When a policyholder is unwell and needs medical treatment, is it not natural that he would want to avail himself of the best medical attention, based on what doctors advise him?
For many years, insurance companies were aggressively selling Integrated Shield plans with all types of riders.
Now, all of a sudden, they are advocating doing away with riders. Could the riders have been a case of mis-selling over the years?
There is a lot of inefficiency in the health insurance industry that needs to be addressed.
First, how do you ensure doctors and hospital groups do not overprescribe or overcharge for treatment?
Second, many people are covered by their employers under group health insurance plans, but they may also have their own Integrated Shield plans.
How are insurance companies addressing the double insurance issue, where they collect two premiums for one risk?
Patrick Tan Siong Kuan