Medical Inflation Mitigation: Why It Is Increasingly Crucial for the Sustainability of Health Insurance Companies

Medical Inflation Mitigation to Stop Claim Leakage That Erodes Profitability

Spiraling medical inflation is no longer just a statistical issue; it is a real threat to the sustainability of the health insurance business. Swelling claim ratios (loss ratios) are frequently driven not by an increase in the number of sick policyholders, but by medical costs escalating out of control.

When hospital tariffs rise and over-servicing practices persist, insurance companies face a difficult choice: allow profit margins to erode or raise premiums, which risks triggering policy cancellations. The answer is clear: medical inflation mitigation must be executed now, not later.

Medical Inflation Mitigation by Understanding 3 Major Business Risks

Without strict medical oversight and verification, insurance companies are highly vulnerable to claim budget leakage due to:

Raising Hospital Bills: Tariff variations across healthcare facilities without tight supervision cause claim costs to exceed reasonable standard limits.
Non-Essential Medical Procedures (Over-Servicing): Prescriptions for expensive brand-name drugs and excessive diagnostic tests that pass administrative verification due to a lack of clinical evaluation.
Absence of Real-Time Clinical Evaluation: Approval of high-cost claims without second-opinion input from medical experts triggers provider disputes and financial losses.

Medical Inflation Mitigation by Implementing OJK Regulations

Through POJK Number 36 of 2025, the Financial Services Authority (OJK) mandates that starting March 22, 2026, every company providing health insurance must possess:

Adequate Medical Capabilities.
An Integrated Digital System for claim verification and Utilization Review.
An independent Medical Advisory Board (MAB).

Delaying compliance with these rules not only increases non-compliance risks but also allows claim leakage to continue eroding company capital every day.

Why Partnering with a TPA Is the Most Rational Solution for Medical Inflation Mitigation

Building medical inflation mitigation infrastructure independently (in-house) from recruiting specialized doctor teams and developing digital analytics to negotiating tariffs with thousands of hospitals demands significant time and financial investment. Partnering with a premium Third-Party Administrator (TPA) delivers a plug-and-play solution. Medical capabilities, digital infrastructure, and a broad provider network become instantly accessible without adding to internal operational burdens.

Global Excel Indonesia: Your Strategic Partner for Medical Inflation Mitigation

With over 25 years of experience in the healthcare management industry, Global Excel Indonesia is ready to assist insurance companies in reducing loss ratios through:

Professional Medical & MAB Teams: Conducting real-time Utilization Reviews to filter out complex and irrational claims.
8,000+ Provider Network (Domestic & International): Strong bargaining power with standardized tariff agreements.
Integrated Digital Platform: Transparent utilization monitoring, claim data analytics, and efficient Coordination Among Guarantee Providers (KAPJ / CoB).
POJK 36/2025 Compliance Readiness: Ensuring your company’s full readiness in complying with regulatory mandates.

Contact the expert team at Global Excel Indonesia at +62 21 5084 5400 or email sales@globalexcel.co.id to execute concrete strategies regarding medical inflation mitigation today.