Mandatory health insurance — set for implementation in stages starting from early 2019 — has the potential to drive the growth of an energetic private healthcare and related medical insurance industry in the Sultanate, according to a high-level official of the Capital Market Authority (CMA), the regulator of the insurance sector in Oman.
Ahmed al Maamari, Vice President — Insurance Sector, said the scheme is expected to spur local and international investments in new private hospitals and insurance businesses, drive employment generation, boost the growth of a strong insurance industry, and support economic development in general.
“Health insurance coverage is not a target in itself, but a tool for fostering the growth of a well-organised and modern private healthcare industry that can attract new technology, advanced treatments and services, and support the development of a new private health insurance sector in the Sultanate,” said Al Maamari.
“The scheme will enhance the delivery of health insurance services in Oman, as well as boost the distribution of private clinics and hospitals across the country. Longer term, it will contribute to improvements in the quality of services provided by the private sector, to be in line with public healthcare standards,” the official told the Observer.
More than two million Omani and expatriate employees of private establishments in the Sultanate are entitled to basic and emergency medical care under the Mandatory Health Insurance system due to be rolled out in phases next year.
The scheme, Al Maamari said, has been conceived keeping in mind three key objectives: Accessibility (healthcare facilities should be located within reasonable distance of the insured); Affordability (pricing of policies should be reasonable); and Efficiency/Quality of services.
For the scheme to be effective, an exponential increase in the capacity of private healthcare services as well as insurance coverage will become necessary, according to the official. Consequently, more investment will be required to build adequate capacity underserved areas of the Sultanate. Additionally, capacity-building in the form of staff recruitment and training will be necessary to meet this projected growth , he explained.
However, boding well for the growth of a strong health insurance industry in the Sultanate is the positive performance of the sector over the past five years, said Al Maamari. Health insurance services have grown at an average rate of 23 per cent per annum over this period. In 2017 alone, the sector accounted for roughly 30 per cent of total insurance premiums collected across all asset classes.
“These positive figures are evidence of the potential for natural growth in health insurance services even without recourse to mandatory health insurance coverage. The overall outlook becomes significantly more promising when health insurance coverage becomes mandatory for private sector employees starting from next year. So we need to be ready with the right infrastructure in order to build an effective health insurance system.”
The goal for all market participants, the vice president said, is to achieve a healthy balance between demand for, and supply of, effective health insurance services. This target can be attained only if a careful balance is achieved in the provision of healthcare services, he stressed.
All of the imperatives have been taken into consideration by the Capital Market Authority — as the regulator of insurance services in the Sultanate — in modeling a suitable Mandatory Health Insurance scheme, said Al Maamari.
“We have also been working in close coordination with various stakeholders, including the Ministry of Health, Ministry of Manpower, Royal Oman Police and Oman Chamber of Commerce and Industry and Oman Insurance Association in the design of a comprehensive and effective health insurance system. It has been suitably structured to cater for the large number of people who will be covered by this scheme, without causing any adverse impacts to employers or the national economy.”
Quality and innovation
Importantly, the scheme will also contribute to enhancements in the value and quality of health insurance products and services offered by insurers. The potential for innovation in the design of products and services is significant, the official noted.
Given the scope and magnitude of the Mandatory Health Insurance programme, a carefully considered and managed roll-out is key, according to the official. “The task at hand is quite challenging, and will require effective supervision from the regulators. It will be a learning curve for all of us, so we have looked at the experiences of other countries to learn from them.”
Keeping this challenge in mind, the scheme will be implemented in a number of stages starting with international companies, consultancies and visitors in the first phase. This gradual approach, he said, will alleviate any significant cost burden on employers. “We will also not proceed to the next phase before undertaking a complete evaluation of the successes and challenges encountered in each phase,” he stated.
A unified policy drafted by the regulator enshrines all of the minimum requirements expected of the key market players, while also safeguarding their respective interests. It is designed to thwart any potential for misuse, abuse, misinterpretation and misrepresentation.
Given the potential for insurance fraud, which is a problem in a number of countries around the world, the scheme will be administered on an electronic platform integrated with all of the stakeholders and market participants, said Al Maamari. This is key to developing a transparent and sustainable health insurance system in the Sultanate, he stated.
The centralized database will incorporate, among other things, insurer registries, medical codings, payment data, and databases of all market participants, the official added.