Student Dissertation

Agency : Insurance Company; Medical Check Up Policy; Health Assessment Function; Feasibility Study; Health; Insurance; PPMC

Objective : • To compare the project costs in terms of total expected cost for each type of test (PPMC and HA) against the total expected benefits for out-sourced and in-house processes. • To see whether the benefits outweigh the costs, and determine if the project will be a sound investment or decision (i.e. a justification of feasibility or advantage).

Background : Health Insurers usually ask for medical tests if the applicant is above 40 or 45 years of age, or if the coverage amount is above a certain sum-insured limit before granting cover to any individual who has applied for policy. This process is known as Pre-policy medical Check-up. Health Assessment is done by taking simple Medical Examination Record (MER) for getting information about the general health status of the individual. It is done for cases below the specified age limit or sum-insured.

Methodology : The study design was analytical in nature where non-probability sampling method was used and all the cases which entered for medical examination were selected. The duration of study was three months where in total 1220 NSTP cases of PPMC and HA, belonging to categories 1 to 11 from the daily Management Information System were taken and analysed.

Findings : • It was found that the current trend of PPMC is running on an overestimated basis whereas for Health Assessment the cases are yet to reach the projected value. • It was also found that the total operational cost for both PPMC and HA is steadily increasing co-related to the number of cases. • For In-House process few onetime costs and few variable costs were added to the process and the service charges paid for the out-sourced system are excluded. • This gives evidence from the comparative analysis that the total cost for running the process as in-house is much lower compared to that of the out-sourced with an average increment of 35% in monthly saving and the company will eventually save a larger amount within a period of one financial year.

Recommendations : As per the current trend of medical tests it was highly recommended that the service charges should be excluded from both type of NSTP cases which will save the overall cost of operations over a longer period of time. It has to be done primarily on major Categories of tests (Category-2, Category- 4, Category-5 and Category-6) which at once will decrease the cost up to a larger extent and will generate a larger chunk of savings. This will further balance the initial one-time costs for setting up the process and will increase the overall cash flow.

In this project the main role of the financial feasibility study for the function was found to be important in the process of decision making and the subsequent outcomes have been studied. A general model was taken to do this study though there can be many others. It also presented a new approach to find and implement the financing requirements for the plan and shows the way company can save and utilise the money for other purposes.


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