Managed Care Models in India: An Investigation on the Ownership and Performance of Health Claims Management

Abstract

Third-party administrators (TPAs), an important member of the managed care model in India, service health insurance claims and intermediate between health insurance companies, service providers and customers. Auditing TPA performance is not a prevalent industry practice because of a lack of regulation. This study explores the rationale behind the trend of insurance companies bringing TPA services in-house and investigates if the performance parameters for TPAs vary based on ownership. Analytical Hierarchy Process (AHP) was used to formulate the hierarchy of performance parameters for the TPA. Assessment of the efficiencies and quality of claims management between internal and external TPAs will enable insurance companies to make more informed decisions on managed healthcare models. Consequently, insurance premiums can be reduced, making health insurance a more viable option and could pave the way towards achieving the objective of universal health coverage. This study’s motivation stems from the possible impact that the performance evaluation of internal and external TPAs has on healthcare delivery, control and costs. The results show that both internal and external TPAs have their own efficiencies and advantages due to their operational models.