Importance of Healthcare Financial Planning in Light of the Pandemic, Health News, ET HealthWorld

By Aditya Sharma

Although still very well known, COVID has made it clear that healthcare spending will always come in unexpected and unforeseen ways. Having a solid financial plan for medical emergencies will help you through these difficult times.

The need for health care financing planning:
A study found that more than 55 million people are pushed below the poverty line each year due to direct health expenses. The Indian government said in 2015 that medical expenses can be seen as one of the main drivers of poverty and that they compensate for any gain in income increase or any program put in place by the government to reduce poverty.

This is of particular concern, especially given global health trends. The incidence of non-communicable diseases, infections and health problems resulting from environmental factors and a faulty food chain is increasing. India is not immune to these trends either. With some of the most densely populated and polluted cities in the world, as a country we are not the image of health.

India faces high rates of vitamin D and B12 deficiency and an increased incidence of cancer and heart health problems. Studies show that 1 in 10 Indians will develop cancer in their lifetime. It is evident that lifestyle-related diseases are one of India’s biggest threats to public health. But the exact underlying causes of these trends are still not fully known and, if known, remain unanswered.

With the numbers showing that medical emergencies are inevitable, the need for a clear financial plan for health care speaks for itself.

While most Indians wish to invest and save for the “good things”, like buying a home or higher education, we are reluctant to invest in defensive sectors like health. The most common form of health care financing planning in the country is insurance, which has a penetration rate of less than 5%. It shows that there has to be a shift in people’s mindset to invest in their health, and more importantly, to raise awareness about it. He also alludes to the need to provide people with other options for planning health care financing.

Role of government
This government must lead this change, set a course and steer markets and citizens towards other viable and effective options. There have been exemplary cases of governments implementing a fully accessible health system to ensure that no citizen is denied care for lack of money. Governments should also encourage citizens to invest in health by floating health care bonds and offering tax exemptions for health care loans.

It is also the government’s duty to strengthen the overall health system by improving the social determinants of health such as living conditions and food security measures. But the responsibility does not lie solely with the government.

While the government sets the course for the future, ultimately the responsibility to steer the ship in that direction rests with individuals, organizations and businesses.

Role of society
Individuals must accept that medical emergencies are absolutely inevitable for everyone and plan their finances accordingly. It is advisable to allocate 10 to 15% of his savings exclusively to health, especially if he is over 50 or has elderly parents or other dependents.

Organizations must understand the value of their employees and take responsibility for ensuring their well-being. As the country is moving towards a knowledge economy, this becomes all the more vital. The productive days that an organization loses to the sick days enjoyed by its employees are detrimental not only to the business, but also to the country’s GDP.

Health care planning by organizations does not have to be limited to financial planning. The adage “Prevention is better than cure” holds here. In addition to providing medical benefits and insurance, they should also explore a holistic approach that focuses on the overall physical and mental well-being of their employees.

Role of the fintech industry
Fintech providers and startups are willing to take risks and come up with disruptive business models. It is very likely that new and effective solutions will come from companies willing to think innovatively, and this is the need of the moment. Existing methods of planning health care financing have proven not to withstand the test of time or, in this case, the pandemic. Hospitals and health care facilities need to be creative and accept alternative models of managing health care finances other than health insurance. They may research ways to create advanced cash flow through innovative instruments such as health cards which are win-win for hospitals (improved customer retention) and patients (monetary savings and better outcomes for patients). health).

Planning for medical emergencies is crucial, especially in a post-covid era that has shown us the flaws in our healthcare system and our collective mindset towards healthcare funding planning. We must embrace and understand the need for strategic planning of our health finances and make an effort to invest time and money in preventative measures. And if and when an emergency does arise, we must be armed with the best means to combat it.

By Aditya Sharma, CEO, Affordplan

(DISCLAIMER: the opinions expressed are those of the author and ETHealthworld.com do not necessarily subscribe to it. ETHealthworld.com will not be liable for any damages caused to any person / organization directly or indirectly.)

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