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| illustration : health insurance risk |
1. Risk and Risk of Pain
In Indonesian language we do not have the original term or root word about "risiko". Because "risiko" is translated from the English "risk". But if we learn right, actually "risk" is related to the Arabic "rizk" which we translate in Indonesian into "sustenance". Both have aspects of unceheartainty, which we often assert that it is the Fate of God. Risk is uncertain, as well as sustenance. Insurance is actually a means of managing risk and can be expressed as a preventive effort (before the onset of illness) in order to prevent the inability of the population to finance expensive medical services.
2. Understanding of Risk
The word risk comes from the English risk meaningful as ................, there is also a saying that word is also influenced by Arabic "rizk" which means "rizki" (fortune). Both words are risk and rizk have the same nature of uncertainty (uncertainty). Insurance takes the concept of risk as an insurance object because the uncertainty can be managed into a form of certainty in another form. Uncertainty of pain risk is acceptable to everyone, which furthermore means there is a risk of the cost to pay for health services in an attempt to recover from illness.
The risk can be managed into a form of certainty that is by making health insurance products that ensure the replacement of medical expenses if the buyer of insurance products that fell ill. This insurance product does not change the risk of illness, but can change the risk of cost impact due to illness. In Indonesia, the risk is often interpreted as a negative impact of a situation that occurs due to a person's negligence. For example, a trader has a risk of loss if his business is not properly managed. The risk is more defined as a form of negative consequence of a situation or action. Though seen from the origin he said, very different from the understanding that has been embraced by generations by the Indonesian nation. Risk is not always negative, there are also positive risks, such as profit risks. But the discussion of risks in the context of this insurance is limited to negative risks.
Looking at the nature and definition of the risk that is defined from the origin he said, then the existing risks can be used as insurance products because the level of risk can be calculated based on the frequency and losses caused. This calculation is referred to as an insurance risk analysis to calculate the premium to be paid by someone joining the group to share the risks described in the beginning of this book.
Often mentioned that for an action there is a risk or danger, everyone understands it. But the time of the occurrence and magnitude of the danger that will happen, is not known by anyone. Humans can only estimate the probability of occurrence and magnitude (severity) of such risks or hazards. Here there is uncertainty about the occurrence and magnitude of these risks. Usually the so-called risk has a negative connotation that is generally people interpret the risk as something that can harm or harm yourself, something that is not expected. Actually, in terms of uncertainty, there is also a risk of luck. In this context, the word luck is a risk, ie positive risk, expected risk, which we distinguish as risk. The focus of the world of insurance is the risks associated with losses both in the form of material and in the form of loss of production opportunities due to severe illness. Judging from the uncertainty, the risk of bringing the similarity with the word fortune that according to the belief of the people of Indonesia, only God knows with certainty the amount, time and manner of acquisition. So risk and rizki / fortune have similarities that is uncertainty, but both are different connotations. The risk of negative connotation (not expected), while rizki connotes positive (expected). Insurance limits the area to the risk of a negative connotation because it is not expected by anyone, so insurance is not a mechanism for chance, to get "rizki" / fortune.
In every step of our lives, there is always a risk, as small as falling due to tripping gravel to a big one like a traffic accident that can cause death or disability. Fortunately God has given human nature that always avoid the risks. Everyone has his own way of avoiding himself from risks. In general, ways to avoid the risks of life are referred to as risk management grouped into four major groups, discussed below.
Risks are hazards, consequences or consequences that may occur as a result of an ongoing process or future event. In the field of insurance, risk can be interpreted as a state of uncertainty, where in the event of an undesirable circumstance can cause a loss.
a. Health Insurance Risk Management
In the science of risk management or health insurance risk management, we know some techniques that face risks that can occur in all aspects of life. These techniques are:
- Avoidance of risk (risk avoidance)
If we smoke, there is a risk of lung cancer or heart disease (cardiovascular). One way to avoid the risk of lung disease or heart disease is to avoid the carcinogenic substances (which cause cancer) contained in cigarettes. If we do not want to get an airplane crash, do not ever get on an airplane.
Many people are doing this management technique for big visible risks. Someone will avoid steep mountain climbing without safety equipment, because the risk of falling into the abyss can be seen directly by the eye. But many people do not realize that such risks can appear 20-30 years as is the case with the risk of lung cancer or cardiac abnormalities due to smoking, so the habit is considered not risky or low risk. Awareness about the long-term risks that must be socialized to the community so that they can anticipate it. Not everyone is able to recognize, feel and avoid risk. There is a group that is only able to recognize and feel, but not able to avoid it. Therefore risk management by avoiding is not enough to protect a person against the risk that will occur.
- Reduce risk (risk reduction)
If risk aversion is not possible, risk management can be done by reducing risk (risk reduction). For example, we make crossing bridges or special crossing lights to reduce the number of people suffering from traffic accidents. Thus, the driver of the vehicle will be careful. Or if there is a pedestrian bridge, then the risk of getting hit by a car will become smaller, but not negate altogether.
A motorcyclist is required to wear a helmet because no one person can escape one hundred percent of motorcycle accident. If a helmet is used, the severity of risk can be reduced, so that a person can avoid death or concussions that require substantial maintenance costs. Intensive care for 7 (seven) days at the hospital for people with concussion in 2005 this can reach more than Rp 20 million. However, for most motorcyclists, who have never witnessed the magnitude of a concussion and how much it will cost to care for a concussion, are not aware of it. Even if they are wearing helmets, it is often just to avoid the penalty of police traffic violation (ticket) by the police which is actually a small risk (which is only hundreds of thousands of rupiah).
- Moving risk (risk transfer)
Any good attempt to reduce the risks we have done does not guarantee 100% we will be free from all risks. Therefore we need to protect ourselves with a third layer of risk management that is transferring our risk to the other party. We may transfer all or any portion of the risk to another party (which may be an insurance company, a social security holding body, a government or other similar entity) by paying a premium or contribution either in a certain nominal amount or in a relative amount in the form of a percentage of salary or purchase price (transaction). With this risk management technique, the risk being transferred is only a financial risk, not an entire risk. There are some risks that can not be transferred, such as pain or feelings of loss felt by the sufferer. This is a very fundamental principle in insurance. Most people do not realize that every moment there is a real risk of death and the risk of death that has the potential to cause a lack of funds for his heirs to live daily or to finance children's education can be transferred by buying life insurance. That is why most people in developing countries do not buy life insurance, because many people do not see death as a financial risk to their heirs.
Taking risks (risk asumption)
If risk is inevitable, it is not biased, and can not be transferred due to a person's inability or no company can accept the risk transfer, then the last alternative is to take or accept the risk (as destiny).
b. Form Of Risk
Forms of risk include pure risk, speculative risk, particular risk and fundamental risk.
- Pure risk is the risk that consequently there are only 2 kinds: loss or break even, for example theft, accident or fire.
- Speculative risk is a risk that consequently there are 3 kinds: loss, profit or break even, for example gambling.
- The particular risk is the risk that comes from the individual and the local impact, for example a plane crashed, a car crash and a ship ran aground. Fundamental risks are non-individual risks and their impact is widespread, for example hurricanes, earthquakes and floods.
c. Risks that can be insured
The risk must be pure
According to the nature of the event, the risk may arise really as a coincidence or accidental and may arise because of a speculative act. Pure risk is a risk that is spontaneous, not artificial, unintentional, or sought even inevitable in the short term. The trader has a risk of loss, but the risk of loss can be avoided with good management, careful spending, and so forth. The risk of loss due to a business is a speculative risk that can not be insured. Therefore there is no insurance that offers coverage if a company loses money. A risk that arise due to an act of intent, because they want to get compensation insurance for example, can not be insured. For example, a person has a death insurance of one billion rupiah, may be killed by his heirs in order to get the benefit / insurance insurance of one billion rupiah. Such deliberate deaths can not be borne. A person who deliberately attempts suicide by drinking insect poison and fails so that hospitalization is not entitled to a guarantee of care, because the risk of illness is not a pure risk. An example of a pure risk is cancer. Cancer, which requires long and expensive treatment, is never expected by the sufferer and therefore cancer is a pure risk that can be insured or guaranteed by insurance.
The risk is definitive
Definitive definition means the risk can be determined the event is definite and clear and understood based on evidence of the incident. The risk of illness and death is evidenced by a doctor's certificate. The risk of a traffic accident is evidenced by a police statement. Fire risks are evidenced by official reports and other evidence such as photos of events.
Risks are static
Static sense means the probability of a relative static or constant occurrence without being affected by a country's political and economic changes. This is different from business risk that is dynamic because it is influenced by political and economic stability. Of course, the risk of being really static in the long run is not much. One's risk of cancer or heart failure will be relatively static, not influenced by economic and political circumstances, but in the long run the risk of heart attack is influenced by the state of the economy. In developed countries, which are relatively wealthy and the population tends to consume tasty food with high fat content, shows a higher probability of heart attack compared to poor countries.
The risk of financial impact
Each risk has a financial and non-financial impact. Insurable risk is a risk that has a financial impact, because that can be taken into account is a financial loss.
Risk transfer is done by paying a premium or contribution to an insurance company, which will provide reimbursement if there is a financial impact of a risk that has occurred. A personal accident, for example, has a financial impact in the form of cost of care and or loss of opportunity to earn income. In addition to financial impact, an accident also creates pain and psychological burden if the accident caused death or disability, so the risk caused a big impact. Of all the impacts that occur, only financial risks in the form of maintenance costs and loss of income due to loss of life or disability. The effects of pain and feelings of loss can not be insured because the size is very subjective. Benefits that insurance can offer to reimburse the financial impact are reimbursement of medical and nursing costs (in the form of money or services) or cash in lieu of lost income due to death or disability.
Risk "measurable" or "quantifiable"
Another condition is the amount of financial losses due to these risks can be calculated accurately. If a sick person should be able to explain the location of the disease, the time of the incident, the type of illness, the nursing home (name and location of the hospital), and the costs required for the treatment being undertaken. For example, Mr. Budi suffered a heart attack in Bogor, on 5 September 2006 and was admitted to hospital. Anu in Bogor city. The cost required for Mr. Budi's treatment is Rp. 20 Million. So that can be included in the insurance scheme is only the cost of care. The pain is very difficult to measure, although we have a variety of instruments, because pain is very subjective. The amount of reimbursement of maintenance cost must be agreed by the policyholder and the insurance which is stated in the insurance contract / guarantee / policy. Especially for life insurance, large financial losses due to death are generally offered in certain amounts, considering the difficulty of measuring the huge financial losses due to a death.
The amount is offered by the insurance companies and agreed by the policyholder. The determination of this particular quantity is called quantifiable, which is the basis for calculating the premium to be paid by the policyholder.
He Size of Risk Must Be Large (large)
The degree of risk (severity) is relative and may vary from place to place and from time to time. The risks that an insurance company can afford must meet the size requirements. The risk of hospitalization costs of Rp 5 million can be assessed by the low income but small by those who earn above Rp 50 million per month. An insurance system should carefully assess (assessment) the risk group to be insured.
Health Insurance Risk Factors
The trend of health insurance in the world is to guarantee comprehensive health services because there is a link between risk with small fees and services that require expensive fees. This is Health Insurance Risk Factors. As an example of a dengue case visiting a doctor, the risk of becoming fatal if further treatment is not borne, because there is a possibility that the person does not continue his service because of cost constraints. Thus ensuring comprehensive health care is a combination of risk reduction and risk transfer. Something insurance schemes that bear little risk, for example, only medication at puskesmas-as formerly practiced with a healthy fund scheme or JPKM, does not meet insurance requirements. Therefore, anywhere in the world, such micro insurance models do not have long-term sustainability. Generally such schemes are short-lived and do not get big.
