Against the backdrop of rising costs, ageing populations, stressed infrastructure, strained resources and shifting regulations, health insurers must develop new offerings and find new ways to operate.
Local insurers are taking various initiatives such as promotion of healthier living, free health information, medical opinions, enhanced claims service and other 24/7 services, among others. While the pay-for-performance principle is being adopted in certain motor insurance, health insurance offerings are limited to service enhancements and are not outcome-based.
The move away from fee-for service is only happening slowly. Despite the need to focus on long-term behaviour, nobody in today’s healthcare industry has this incentive. Successive governments, which are closest to the healthcare ticking bomb, retain incentives which are more focused on election cycles.
A cross-sector effort by EY strategists and practitioners – representing life sciences, healthcare, insurance and actuarial, government and public sector, consumer products, and technology – presents a vision of how healthcare might be reimagined. This follows our article EY Consolidates Its Health Consultancy (Times of Malta, August 16) which highlights how EY will be mobilising a worldwide team to provide the capacity to rapidly share leading practices and solutions across markets and bring diverse delivery teams to meet client needs.
Health insurers must work more closely with those parties involved in the funding and delivery of healthcare and well-being
The health insurance industry is being disrupted by a convergence of trends, ranging from growing pressures on the insurance sector to megatrends reshaping healthcare itself. Since the power of this vision is in its alignment with the future of healthcare and health insurance we shall explore some of the trends disrupting the sector.
Chronic diseases such as heart disease, diabetes and hypertension are the biggest drivers of global healthcare spending. They share two characteristics: a strong behavioural component and a long-term play out. The greatest need is therefore a focus on changing long-term behaviour and managing chronic diseases over the long run in more efficient ways. Yet, nobody (providers, insurers, employers and government) in today’s healthcare systems has the incentive to focus on the long-term needs of patients.
What if you could develop an offering that, for the first time, truly aligned incentives around long-term behavioural change?
Mobile apps are blurring the lines between smartphones and medical devices, and are allowing individuals to conveniently and continuously track everything from blood sugar to sleep patterns. The potential of these technologies for managing chronic diseases is nothing short of revolutionary. Moreover, these technologies can monitor patients continuously as they go about their everyday lives, allowing for timely intervention when needed.
Could a new approach be powered by mobile health technologies, allowing much greater insight and influence over patients’ behaviours?
Big data is rapidly being generated in the form of electronic health records, payer claims, pharmacy data, laboratory test results, patient registries, and mobile health technologies. However, in healthcare, much of this data remains siloed and nobody sees the full picture.
What if we could make data a central component of new insurance offerings, creating the complete picture to better understand and influence risk?
At a time when customers are being empowered with more transparent information and more freedom of choice, this is particularly challenging for health insurance companies. Historically, insurers have not been very customer-centric. They adopted the independent agent model that created a chasm between insurers and their clients.
Could we develop a proposition which places the customer squarely at the centre, use deep data about customers to understand their needs and deploy mobile health technologies to build relationships and guide customers’ behaviour?
There is no single correct response to these demands and companies could conceivably develop a number of innovative and viable new models. A potential new model developed by EY contemplates the possibility that the insurance contract changes from a short-term transaction to a longer-term partnership in which the insurer and the insured collaborate to improve behaviour and health outcomes.
In the EY model, the role of the insurance company changes: from being just in the business of quantifying and pricing risk, the insurer expands into the business of influencing and lowering it. The amount of information available to the insurer increases exponentially in this new data-centric, technology-enabled model, giving the company a much-deeper understanding of the customer than has been possible so far.
Health insurers must work more closely with those parties involved in the funding and delivery of healthcare and well-being. Insurers would need to assemble a consortium of people and teams with complementary assets and skills that might include healthcare provider networks, data consolidators, technology providers and the public sector.
In this way, together we will engage with clients, posing the right questions to develop the answers that lead to practical solutions in healthcare.
Shawn Falzon is executive director for assurance at EY Malta.