The role of insurance in health care management in India Hima Gupta Institute of Management Studies, Lal Quan, Ghaziabad, India Abstract Purpose – Health insurance in India has shown little development. It has not been able to evoke enthusiasm among Indian insurers. Consequently, several reports on Indian health care insurance have been produced. The purpose of this paper is to offer a review of this matter. Design/methodology/approach – Critical review of related published and grey literature. Findings – Almost 79 per cent of health expenditure is borne by private bodies and the rest by the public. Authors argue that to stimulate private health insurance growth, the Indian government should recognize health insurance as a separate line of business and distinguish it from other non-life insurance. Particular emphasis is placed on the present health care scenario in India and international field generally. A global comparison of selected Asian countries, regarding their national incomes and health expenditure in public and private sectors, generates insights. Third party administrators (TPAs) facilitate a cashless health services for their customers and offer back-up services to the insurance companies. Desired strategies and ways of furthering the role of the Insurance Regulatory and Development Authority in acting as a regulator for the purpose of ensuring the industry’s smooth functioning is an issue for India’s health services. Originality/value – Information about the present complexities in the health insurance market has been gathered from various sources and summarized. Keywords India, Health insurance, Health services, Expenditure, Financing, Public health Paper type Literature review Introduction The World Health Organization defines health as complete physical, mental and social well-being, not merely the absence of disease and injury (Parekh, 2003). Accordingly, a country’s health system comprises all the organizations, institutions and resources devoted to produce health services. Health care has always been a problem area for India, a nation with a large population and a substantial portion living below the poverty line. Consequently, health care access and equity become important issues, and health insurance has not been developed to its immense potential in the world’s fifth largest economy. An estimated 1.3 billion people worldwide lack access to effective, affordable health care, while more than 150 million people in 44 million households worldwide every year face financial ruin as a direct result of large medical bills. Yet most policymakers have assumed until recently that poor families in developing countries – whose survival is precarious – would not pay health insurance premiums even to forestall the costs of future hospitalization (International Conference on Social Health Insurance in Developing Countries, 2005). Table I suggests that public health care is concentrated in rural areas that lean towards prevention while private units are curative only mainly to discourage malpractice issues. Further, public domain expenditure is met by center, state, local The current issue and full text archive of this journal is available at www.emeraldinsight.com/0952-6862.htm Health care management in India 379 Received 14 April 2006 Revised 15 October 2006 Accepted 18 October 2006 International Journal of Health Care Quality Assurance Vol. 20 No. 5, 2007 pp. 379-391 q Emerald Group Publishing Limited 0952-6862 DOI 10.1108/09526860710763307