A Study on the Effectiveness of Third Party Administrators in Health Insurance Sector with Reference to Medical Cost Management

Abstract

India has made large contribution towards the health care sector due to the substantial expansion in health sector.Health insurance sector has an important role  in financing health care. In recent days TPAs also have a vital role in providing health insurance.

Third Party Administrators (TPAs) are mainly the companies which are licensed by IRDA  and they are similar to the BPOservices  in the Health Insurance. The TPAs were introduced by IRDA to create a new management system and to control and regulate  healthcare services . The systemof Managed Health care   was first introduced by United States in the year 1973 and then the same system was followed in India. This paper makes an analysis on the effectiveness of TPAs in health insurance particular to medical cost management.

OBJECTIVES The TPA affects primarily three stakeholders namely, the healthcare providers/ Institutions, insurance companies, and policy holders. Questionnaire method is used for hospital administrators empanelled with TPA and policy holders of health insurance.However, in order to measure  the efficiency of TPAs various indicators like timely claim payment, cost of receiving health care, affordability, resolving claim disputes, preparation of claim report and way of avoiding abuse of health care are used.Available secondary data from the insurance companies and hospital networks also may be used to measure the effectiveness of TPAs by analyzing the cost of insurance premium, cost of medical care etc.