Medical insurance has to raise its game

September 30, 2019

Global healthcare delivery is going to transform in the next 20 years and drastic changes need to be made to the existing health insurance business model, if we are to keep up. The reality is that health insurance as we currently understand it is going to change, so we need to proactively evolve our approach now if we are to meet the needs of future customers and patients.

Why is this important? Because it will affect every single one of us.

Currently, one of the primary purposes of insurance is that individuals are covered for the unexpected. But in the future, health issues will be identified, and often addressed at birth, thanks to major advancements coming down the line in the form of personalised medicine as well as gene editing and gene therapy.

Allianz Care recently commissioned futurologist Ray Hammond to deliver an in-depth report looking at how medical science and healthcare delivery will be transformed globally between now and 2040.

The good news is that we have lots of reasons to be very optimistic. ‘Future Health, Care and Wellbeing’ outlines a future where healthcare will be very much focused on disease prevention.

Sophisticated methods of prediction and detection will allow patients to have more control over their health, and advances in personalised care will greatly improve treatment outcomes.

The challenge for insurers is that insurance is based on the premise of protection against the unknown. Yet when we roll the clock forward, health will no longer be an unknown quantity.

With that in mind, we may see insurance premiums, which used to pay for health events that ‘might happen’, move towards a dedicated fund set up to pay for treatment following unexpected accidents, and to access the latest technology to treat conditions which can not be dealt with at birth.

This could take the form of different funding models, saving products or new forms of insurance models like the emerging trends in community insurance. Improvements in digital health will also have a huge impact on how individuals access their personal health information. As it stands today, doctors lead medical intervention and all the data collection happens within the medical community.

However, thanks to multiple advancements in technology, that power is shifting to the individual, meaning more information will sit with the patient - a trend that we expect to continue at speed. Armed with this information, patients of the future will feel more empowered and in control of their own healthcare.

However, the question of how they will use this information and what we as insurers can do to help in this regard, remains. Having more information can make things complex and confusing rather than making things simpler.

For example, imagine your 14-year-old daughter takes a DNA test that says she has a 20 per cent chance of developing breast cancer. What do you do with this information? In some countries, incentivisation programmes exist to encourage you to undertake preventative procedures, but this kind of treatment has psychological and economic implications.

Not only that, but how do you know which specialists have a strong track record of successful treatment outcomes, where they are based, and which offer quality care at competitive prices?

This is an area that insurers will need to step into, using their data, expertise and medical network to come up with a proposition which matches the way people want to access healthcare, to provide guidance on treatment options and the most suitable specialists or hospitals, based on individual circumstances and the person’s location.

All of these considerations need to be taken into account as we look to the future of the health insurance industry.

The calculated insights in this report, anchored in extensive research and expertise, are an invaluable prompt for not only imagining our customers’ needs in 2040, but in preparing our business for these changes.

We have to start now. Our role needs to evolve from insurer to health partner, focusing on advising and guiding, becoming the bridge that connects people who need care, with the right doctors, specialists and hospitals, and helping them to decipher the increasing amount of data.

This article first appeared in FT Advisor.