Critical Illness Insurance - Alternative Forms of Critical Illness Insurance

Alternative Forms of Critical Illness Insurance

Typical critical illness insurance products refer to policies where the insurer pays the policyholder a pre-determined lump sum cash payment if the policyholder is diagnosed with a critical illness listed in the policy. However, alternative forms of critical illness cover provide direct payment to health providers to cover the high medical costs in treating critical illnesses such as cancer, cardiovascular procedures and organ transplants. The maximum amount is set out in the insurance policy and defined per episode of treatment.

These critical illness insurance products generally pay hospitals directly to avoid policyholder’s incurring out of pocket expenses and lengthy reimbursement processes. In most instances of this alternative to the lump sump critical illness insurance, policyholders may decide where they will receive treatment among a pre-selected group of hospitals.

Some forms of critical illness insurance also offer policyholders the option to travel to highly specialised hospitals in other countries to receive treatment. These policies usually include travel and accommodation expenses for the policyholder and a companion, as well as other concierge services such as translators or personal nurses.

While being a rather niche market that targets high net worth individuals and company employees of multinationals and other global businesses, coverage that pays for critical illness treatments has been recognised to improve competition among healthcare providers by empowering patients with more choices and improving the likelihood of survival beyond local capacity. While some large insurance companies offer these types of global critical illness coverage, the primary players have been patient service organisations that enable access to world class care for patients and offer decision support and quality control of the medical process with the twin aims of reducing costs by picking fewer but more effective procedures, involving the patient in key, informed decision-making and acting as patient advocates in the often fragmented and complex healthcare system.

For example, Harvard Business School Professor and Monitor co-founder, Michael E. Porter, and Professor Elizabeth Olmsted Teisberg argue in their book, “Redefining Health Care: Creating Value-Based Competition on Results” that the right kind of competition in the healthcare system can achieve substantial gains in both quality and efficiency. They cite the example of Preferred Global Health (PGH), a global patient organisation operating in Europe, the Middle East and Asia that offers a best outcome policy, Preferred Care, which orchestrates and directly pays for its members to receive treatment at the top 1% of hospitals in the USA. PGH, the authors write, helps its subscribers choose among world-class providers and treatments. In order to find the highest-quality providers, PGH follows independent third-party rankings and identifies those with the most experience in advanced treatments, including the volume of procedures undertaken by specialists and by the hospital, documents their effectiveness and asks them to participate in quality-improvement processes. By providing patients with meaningful choice and quality controlling the delivery of health care, information is disseminated and best value and medical outcomes can be maximised.