Pulling the plug on inflated medical insurance claims, the Armed Forces Medical College, Pune has brought out a first-of-its-kind standard treatment guideline that specifies the average treatment cost for 35 common diseases.

In many of the cases, the rates are a fraction of what patients have been claiming from insurance companies.

For instance, AFMC points out that the maximum charges for a caesarean section, one of the most common claims reaching insurance companies, will not exceed Rs 5,525 in a tertiary hospital with more than 100 beds.

The same procedure can also be carried out by spending Rs 393 in a single-doctor managed clinic.

On the other hand, insurance company officials said medical bills claimed by policy-holders touch Rs 40,000 to Rs 50,000 for a caesarean case.

Depending on the size of hospital and the seriousness of the disease, a patient suffering from pneumonia can complete his treatment by paying anything between Rs 360 to Rs 4,280.

Similarly, the total cost of treating Japanese Encephalitis could be in the range of Rs 348 to Rs 31,264, but not more.

Insurance companies said the claims are often five to ten times higher than the AFMC rates.

Insurers said the rates fixed by AFMC seem reasonable when compared with the claims reaching them today.

That's because the peak rates are not just determined by the number of beds in the hospital but also by the complication of the illness that requires a patient to be admitted to a tertiary hospital.

HEALTH CHECK The real cost of treating illnesses (Figures in Rs)
Disease	Level 1	Level 2	Level 3	Level 4
Diabetes	34,225	35,119	57,027	66,229
Hypertension	4,236	3,909	4,517	23,753
Viral hepatitis	571	840	3,498	17,391
Oral malignancies	189	145	149	24,129
Level 1: Single doctor;  2: 10 to 30 beds; 3: 30 to 100 beds;  4: Above 100 Source: Armed Forces Medical College, Pune

The study was commissioned by the ministry of health and family welfare and the World Health Organisation.

The data is designed to help companies offering medical insurance improve their financial bottom line.

Public sector health insurers generated 62 per cent of the health insurance premiums in 2006-07. However, the business was largely unprofitable since disbursements accounted for 118 per cent of annual premium collections.

The AFMC document, generated after month-long consultations with various stakeholders in the healthcare industry, has four types of costing to take into account the size of the hospital.

AFMC had collaborated with prestigious hospitals like All India Institute of Medical Sciences, Post Graduate Institute of Medical Sciences, Chandigarh, and NIHAMS, Bangalore in preparing the guidelines. All 11 departments in AFMC and 50 to 60 doctors had participated in the programme.

According to a senior official with a public sector non-life insurance firm, companies like Oriental Insurance Co Ltd, National Insurance Co Ltd, New India Assurance Co Ltd and United India Insurance Co. Ltd are planning a joint meeting to discuss how the document can be used while screening the claims.

"Though it is an official document, we cannot follow the costing pattern unless the government notifies it as a national guideline. Even if we offer double the amount mentioned in the document, it will be several times cheaper than the current claims," the official said.