ROLE OF HEALTH INSURANCE:- 1.

 Financial protection to individuals with catastrophic health

events. Health insurance, like car insurance, protects individuals from unpredictable and financially
catastrophic events. Like car crashes, catastrophic health events are both rare and difficult to predict,
and their costs are far beyond most people’s means. Drugs to treat cancer or multiple sclerosis can run
more than $10 000 per month, a crushing amount for all but the few. Organ failure requiring a
transplant can lead to hundreds of thousands of dollars in costs. 2. Broad access for small usage
fees. Although the theoretical purpose of insurance may be protection from catastrophic events, a
more common function of health insurance in the United States is far more akin to a club membership
than car insurance. In exchange for an annual fee, beneficiaries receive access to free or low out-of-
pocket cost services, such as routine doctor visits. 3. Negotiating health services. Health insurers
leverage their market power to obtain price concessions from clinicians or hospitals and health care
systems or, alternatively, to screen out high-cost providers from their networks. Covered patients
benefit from these discounts even when paying out of pocket for services (with the exception of
prescription drugs, for patients often pay list prices even when they have insurance). 4. Enhancing and
ensuring the quality of clinicians and hospitals. Both commercial and government insurers have
developed measurement efforts that aim to monitor and improve the quality of hospitals. Examples
include both quality ratings that help patients and plans select which hospitals to engage, and
exclusion of certain hospitals from providing types of services based on quality. 5. Nudging individuals
toward staying healthy. Health insurers for the past decade have experimented with benefit designs
that encourage healthy behavior. This includes premium reductions for individuals who join health
clubs or stop smoking. Value-based insurance design (VBID) is another example.
HOSPITAL ROLE FOR THE SICK WHO ARE INSURED:- Hospital of today is the evolutionary product of
long struggle. It is expression of man's right to be well and it is the formal recognition by the
community or social structure of the country of its responsibility for providing the means of keeping
him well. You know Health as defined by WHO is "a state of physical, mental and social well being and
not merely absence of disease or infirmity". The task of hospital is to restore health of community.
Therefore, Hospital is defined as "integral part of social and medical organisation the function of which
is to provide complete health care viz. preventive, promotive, curative and rehabilitative and hospital
is also a centre for training and research of medical and paramedical staff". Hospital is also defined as
an institution where "for the patient it is a place to receive medical care; to the physician it is a
workshop in which he/she practices his profession; to medical or nursing student it is an educational
institution.Patient is at the centre of gravity in entire working of hospital as depicted in the figure.
Hospital is very complex organisation wherein patient is at the centre of gravity of entire operations.
Hospitals are focal point of delivery of health care services to entire community irrespective of age,
sex, cast, creed or colour. The diversity of staff contributing towards patient care from highly skilled
physicians, nurses, technicians, administration and unskilled staff. Hospital has continuous operation
(24 hours working) without true off makes it more complex in nature. Hospitals deal with life and
death and surprisingly in many areas of hospital operations there is dual line of authority.