By Suman Katragadda

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In India, health insurance has long been designed to step in only after a medical crisis, much like a seatbelt that activates post-impact. This reactive model, focused largely on hospitalisation costs, is becoming increasingly unsustainable in the face of rising chronic diseases, higher claims, and growing expectations from policyholders.

The healthcare sector is now at a turning point. For the system to remain both affordable and effective, prevention must move from the margins to the centre. And it is health insurers, more than hospitals or doctors, who are best placed to lead this change. With access to patient data, touchpoints across the healthcare journey, and long-term financial incentives, insurers can play a transformative role. But doing so requires a complete rethinking of how outpatient care (OPD) is delivered, accessed, and paid for.
The problem with preventive care
Let’s start by redefining what preventive healthcare really means.

In today’s context, “preventive care” is often reduced to health check-ups or diagnostic packages. But taking tests without timely follow-ups or medical action is not prevention; it’s passive observation. True preventive care involves early identification, consistent monitoring, and timely intervention, especially for chronic conditions like diabetes, hypertension, or lipid disorders.

It demands more than one-off consultations; it requires care continuity. For instance, when a patient’s blood sugar levels are high, it’s not enough to spot it in a report; there needs to be a structured process for reassessment, medication adjustments, and lifestyle guidance. If that doesn’t happen, the condition worsens quietly until an expensive and avoidable hospitalisation becomes inevitable.
The utilisation paradox: Under, over, and just right
India’s outpatient department (OPD) insurance market faces challenges in delivering genuine value. Most products focus on coverage limits rather than care pathways, leading to poor engagement, misuse, and rising costs.

The core issue is a misunderstanding of utilisation—when, why, and how people access care. This disconnect has created two extremes:

Under-utilisation: Patients with chronic conditions skip essential follow-ups, tests, or medications due to cost, time, or lack of awareness. This neglect leads to unmanaged health issues and, ironically, a higher probability of hospitalisation, creating expensive claims for insurers and poor health outcomes for patients.

Over-utilisation: On the flip side, some OPD insurance models incentivise misuse. For example, take a plan offering Rs 30,000 coverage with a Rs 3,000 cap per visit. Providers might encourage patients to return frequently just to max out the benefit, resulting in 10 visits for minor issues, consuming the full amount in just a few months. For the remaining year, the patient receives no real care support, and their condition may worsen.

Both extremes result in wasted money and ineffective outcomes.

The real opportunity lies in what we call right utilisation—a balance where patients access only the care they need, based on their specific health risks, condition severity, and lifestyle. Achieving this at scale is where insurers can shine.
Building the blueprint
What would optimal care utilisation look like?

Consider a patient managing multiple chronic conditions such as diabetes, hypertension, and high cholesterol. An ideal care pathway would go beyond a standard checklist; it would include timely HbA1c tests, regular blood pressure monitoring, medication adherence, and structured follow-ups with physicians. But effective care isn’t one-size-fits-all.

To be truly impactful, care coordination must take into account the patient’s medical history, risk profile, socioeconomic context, lifestyle habits, and access to local healthcare resources. It must operate within realistic cost constraints while still delivering tangible, measurable health outcomes.

Now scale this for millions of patients. Achieving this level of personalised, proactive care requires more than manual processes. It calls for intelligent algorithms, tech-enabled care management platforms, and timely digital nudges delivered through health coaches or apps where every interaction is clinically justified.

This is precisely where health insurers can step up. With access to rich datasets, claims, diagnostics, and risk scores, they are uniquely positioned to shift from being passive payers to active enablers of preventive care. By investing in scalable care coordination tools, insurers can transform into true health partners, driving better outcomes across the board.
Why the current OPD insurance model fails
Today’s OPD insurance products are largely transactional and siloed. They’re sold as add-ons or independent covers, often with low premiums and loose controls. The intention may be to democratise outpatient care, but the result is a model that invites high-frequency users while ignoring the need for care continuity.

The biggest flaw? Designing products without understanding utilisation behaviour. This leads to adverse selection; only those likely to make excessive use of benefits sign up, leading to losses for insurers. And when costs rise, insurers often tighten claim rules or raise premiums, creating a cycle of dissatisfaction.

To fix this, insurers must think beyond products. They must build programs. Programs that combine IPD and OPD coverage into integrated plans. Programs that track compliance. Programs that flag underuse or overuse. Programs that reward patients for staying within care plans. Programs that prevent rather than react.
The path forward
Preventive healthcare is not just a moral imperative—it’s a business one. By reducing hospitalisations through right-timed interventions, insurers lower high-cost claims. By engaging customers more frequently on their health, they build stronger relationships. And by promoting health outcomes, they align better with regulatory expectations and public trust.

Of course, this isn’t easy. Utilisation models will need to change. Insurer-provider relationships will need recalibration. New technologies will need to be embraced. But the cost of not changing is far higher.

India cannot afford to keep spending on sick care when we have the tools and knowledge to manage health proactively. Health insurers are best positioned to drive this change not just because they pay for it, but because they have the power to influence when and how people seek care.

If we get this right, OPD insurance won’t remain a failed concept. It will become the backbone of India’s preventive health revolution.

(Edited by Kanishk Singh) (Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)