Aster pins hopes on growth in medical insurance penetration

Cash still rules in hospitals in North Kerala at about 80%

CL Jose

KOCHI: Medical insurance is set to redefine the healthcare sector in Kerala. With the payor mix increasingly leaning towards insured patients, Aster DM Healthcare claims it will reap benefits from this new trend.

Dr Nitish Shetty, CEO of Aster DM Healthcare India, said the insured patients segment for Aster has increased by 120 basis points (bps) in the financial year 2023-24 (FY24) to 27.3 per cent, as did international patients, having grown to 5.4 per cent improving by 76 bps during the said period.

“This shows that the healthcare landscape is going in for an overhaul and the sector majors are pinning their hopes on tertiary and quaternary care for the bulk of their revenues, going forward,” said an industry expert while talking to businessbenchmark.news.

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An Aster top official revealed that the revenue from medical value travel (MVT) or health tourism has witnessed decent growth during FY24 after having jumped almost 44 per cent to Rs188 crore from Rs131 crore compared to a year ago, and this has contributed 5.1 per cent to Aster’s top line.

According to Mordor Intelligence, the India health and medical insurance market size is estimated at Rs0.91 trillion in 2024, and is expected to reach Rs1.5 trillion by 2029, growing at an annual compound growth rate of 10.60 per cent during the forecast period (2024-2029).

Insurance penetration key

The industry sources aver that the penetration of private insurance is the key to healthcare growth in the future.

 “We have experienced a great deal of benefit when we do tertiary care and quaternary care work. Since these are expensive treatment processes, the insurance penetration helps in making the high-end work accessible to the common man provided he/she is insured,” they added.

While hospitals in big cities like Bengaluru generally enjoy a fairly high insurance penetration rate of 60 per cent or above, in Tier 2 cities in Kerala such as Kochi, only 50 per cent of the patients are covered by insurance.

North Kerala still down

Coming to North Kerala, cash patients are a large majority, at about 80 per cent with only around 20 per cent covered by medical insurance.

“So, this is something which is going to change drastically. Though at a group level, we have seen more than one-and-a-half per cent growth, at a particular unit level, the growth in insurance patients could reach double digits also,” Dr Shetty added.

Post-Covid growth

The insurance penetration has been growing post-Covid as awareness among the general population has improved a lot since then. More importantly, the government has embarked on a lot of initiatives to improve insurance coverage.

“The government has concluded that universal health insurance is a possibility though a challenge too. So the only way we can address India’s requirement of comprehensive health coverage is through universal health insurance coverage,” he added.