Risk Management Research On Commercial Health Insurance Of China

The New Reform depicts a blueprint of China’s future medical security system inwhich commercial health insurance plays an important role. Because of thecharacteristics of China’s basic social health insurance, the level of medical securityavailable to citizens is to some extent determined by the coverage scope anddevelopment level of commercial health insurance. In recent years, with the public’sclimbing demand for medical security, the needs for health insurance are always in thefirst place among all types of insurance products. However, the huge market demandand frequent industry favorable policies failed to stimulate the enthusiasm of theinsurance companies. The insurers are always cautious about the health insurance.Ultimately, the high operational risk and low profitability are the main reasons toconstrain the development of commercial health insurance in China. Therefore aprobe in the operational risk factors and the feasible risk management approacheshave some important theoretical significance and practical value to the supplyincrease and effective development of China’s commercial health insurance market.The paper firstly analyzes the institutional environment, operation model andthe product supply of China’s current commercial health insurance market. On thatbasis, it points out that the constraint for development is mainly due to the insurers’lack of all-around and objective understanding of the operational risk and effectiverisk management approach. Then the paper analyzes the risk factors of maincommercial health insurance products (illness insurance, medical insurance andnursing care insurance) in terms of pure risk, design risk, induced risk and relativerisk, and clarified the causes and characteristics respectively. This paper refers to thetraditional insurance risk management methods, as well as the best practice of themedical cost control of China social security, US managed care and Bupa healthinsurance risk management. But due to the differences in business and marketconditions and health care system, experience from life insurance, social security andforeign health insurance risk management approaches can only be used for referencerather than imitation and copy completely. Product management and healthmanagement are two good and practical breakthrough points for the implementationof effective risk management for China commercial health insurance.Strengthening health insurance risk management from product angle is easy for insurance companies to implement and there is still much room for improvement.Based on the analysis of the risk characteristics of illness insurance, medicalinsurance, nursing care insurance, and combined with the understanding of healthinsurance risks gained from recent years’ industry operation practice, this paperproposes specific methods to conduct risk management in product pricing anddesigning process.This paper also explained from another angle, which is the positivesignificance for insurance companies to reduce health insurance operational risksthrough health management activities. It analyzes the feasibility of combining healthmanagement with insurance business, and proposed the specific methods for thecombination on the product level. In the meantime, it puts forward the practical plansfor insurance companies on operation management, information system support afterintroducing health management.After proposing risk management methods and suggestions in terms of productand health management, this paper demonstrates how to execute risk control onproduct development and pricing, designing, health service provision through a cancerproduct development case study. Also it conducts analysis on the implementationeffect so as to combine theory and practice more closely.