Problem Statement and Challenge in Family Insurance Benefit Management

Introduction

In Nepal Nepal - Social Security Fund , insurance policies are designed to provide coverage to all members under a single plan (Spouse and children) using openIMIS, ensuring financial protection in times of medical emergencies (Medical expenses). These policies typically offer a fixed lump sum benefit that can be utilized by any insured family member. However, a significant challenge arises due to the lack of real-time deduction of the used benefit amount, which can lead to financial miscalculations and losses for all stakeholders.

Problem Statement

In the current system, when multiple members (Spouse, children, beneficiary) require hospitalization simultaneously, their medical expenses are not deducted from the family’s total benefit amount in real time. Instead, the deduction occurs only at the time of discharge after the claim submission process. This delay creates an illusion that the entire lump sum benefit is still available, which can lead to financial complications when another member attempts to utilize the same benefit amount.

Challenge

The main challenge is the risk of insufficient balance when multiple claims are made but not deducted instantly. Since all members see the same undeducted balance, they may assume sufficient funds are available. However, when multiple claims are processed simultaneously, one or more members might end up without sufficient coverage, leading to out-of-pocket expenses, delays in treatment, and potential financial losses for insurance companies, hospitals, and policyholders.

Example Scenario

Consider a family of four: a father, mother, son, and daughter. They have a family insurance plan with a fixed lump sum benefit of $10,000.

1. The father is admitted to the hospital and incurs medical expenses of $6,000. However, since deductions happen only at discharge, the system still reflects the full $10,000 balance.

2. At the same time, the mother falls ill and is admitted to another hospital, assuming there is still $10,000 available. Her treatment costs $5,000.

3. When both are discharged and claim submissions are processed, the total expense becomes $11,000 ($6,000 for the father + $5,000 for the mother), but the available insurance balance is only $10,000.

4. This results in a shortfall of $1,000, which must be covered by the family out of pocket.

5. The hospital and insurance provider may also face disputes, as both admissions were assumed to be covered under the policy, but the delayed deduction led to an unanticipated deficit.

Solution / Strategy

The booking mechanism in openIMIS has been implemented in Nepal - Social Security Fund to facilitate real time ceiling management for beneficiary.

Open

To address this issue, an advance booking system is implemented before a claim is submitted. Each service or item used during a patient’s stay must be recorded as a booking in the openIMIS system. The booking system will reflect the remaining benefit in real time by deducting the total benefit from the cumulative booking sum.

Key aspects of the solution:

1. Advance Booking System: Every service/item used during the patient’s stay is logged as a booking in openIMIS.

2. Real-Time Deduction: The total benefit amount is dynamically updated as services are booked, ensuring that all stakeholders see the accurate available balance.

3. Validation at Claim Submission: The total booking sum for a beneficiary from a specific health service provider must match the total claimed amount.

4. Soft Deletion of Booking Logs: After successful validation and claim submission, the corresponding booking logs will be soft deleted from the system.

5. Transparency for Hospitals: This system allows hospitals to track the actual balance left in the insurance coverage and manage patient services accordingly.

Algorithm/ Mathematical Representation of Real-Time Balance Update

Let:

• B = Total family insurance benefit amount

• b_i = Booking cost of a service/item for a patient i

• C = Claimed amount at discharge

• R = Real-time available balance

The booking system in openIMIS which is a real time experience at SSF Nepal - stakeholders (Insuree , Health Service Provider and Insurance organization) can avoid financial discrepancies, ensure transparency, and enhance the efficiency of family insurance benefits management.