It may be time to rethink the health insurance “value chain.”
A new survey from RGA finds that insurers in Southeast Asia are thinking beyond the traditional customer journey and embracing the concept of a health insurance ecosystem to improve customer engagement and drive innovation though digital transformation. The result could change the way the industry approaches sustainable health products and services.
To understand the future of Health Insurance Ecosystems (HIEs), insurers must first break from the past. Traditionally, many viewed customer engagement as the number of interactions that start at underwriting and progress through to claims. Each link, like each exchange, ideally binds the policyholder closer to the insurer through good customer service experiences.
The problem: Most policyholders go through underwriting and then have nothing to do with an insurer until it is time to make a claim. Protection risk connects the two – and little else. The tenuous relationship becomes most relevant at renewal, when the insured often shops around for better policy terms. This happens when there is little loyalty or perception of added value that incentivizes the policyholder to remain with his or her current provider. After all, policyholders expect health insurers to do more than just pay bills; research has demonstrated again and again that customers are interested in healthcare services. At the same time, the amount of health and claims data available has increased significantly. This provides a unique opportunity for insurers to provide more customized and coordinated care.
The problem: Most policyholders go through underwriting and then have nothing to do with an insurer until it is time to make a claim.
So, what if that same company could connect the consumer to a much broader digital healthcare network – an ecosystem of digital health providers, healthtech start-ups, and more as part of the product offering? Savvy insurers could pool data and insights from across systems and services to establish more personal, informed, and valued relationships with consumers and provide more customized and coordinated care, ranging from basic digital services to more innovative platforms that provide holistic care, chronic disease management, genetic-testing support, or other benefits.
Such networks of services and systems are emerging across the Southeast Asia (SEA) region. RGA’s recent SEA Health Survey on Health Insurance Ecosystems (HIEs) drew on responses from 20 companies across six Southeast Asian countries (Indonesia, Malaysia, Thailand, Singapore, Vietnam, and the Philippines); 77% of respondents believed HIEs were “game changers,” with the ability to accelerate market position by sharing resources to more rapidly develop innovative capabilities and achieve a competitive advantage.
What capabilities? Roughly half of responding insurers currently rely on basic systems for policy and benefit verification at the point of claim. However, more than two-thirds expressed interest in developing claim systems with machine learning capabilities, or rules engines with logic that can be adjusted automatically, and more than half were interested in using data and analytics to better detect and prevent fraud and improve operational efficiencies.
77% of respondents believed HIEs were “game changers,” with the ability to accelerate market position by sharing resources to more rapidly develop innovative capabilities and achieve a competitive edge.
The capabilities don't end there. Confidence in the future of HIEs in Southeast Asia and elsewhere seems well founded. Consumers are spending more on health and wellness and increasingly demanding access to convenient, affordable, and digital healthcare solutions amid growing incidence of chronic conditions, increased longevity, and the rising popularity of mobile devices and online solutions. Currently Asia is home to half the world’s internet users and leads digital innovation worldwide in multiple sectors. Indeed, venture capital and private equity investments in digital health in Asia have grown at 38% CAGR from 2015 to 2020.
And still, even as consumer expectations for healthcare quality and access rise, traditional, labor-intensive healthcare delivery models continue to struggle to keep pace with demand. The average number of doctors per 1,000 people in Southeast Asia is lower than the OECD average, and the World Health Organization has estimated a global gap of nine million nurses, with Asian nations suffering some of the most severe understaffing.
HIEs promise to help bridge this gap by enabling insurers to add services such as telehealth, e-prescription, and wellness programs. In RGA’s survey, 50% of respondents offer policyholders telehealth and e-prescription services, and another 45% are developing these capabilities, with telehealth on track to become a competitive pre-requisite. Half of respondents also offer wellness programs, with another 36% indicating plans to develop programs. Disease management is potentially the next big thing in the region, with the highest proportion of insurers (68%) sharing plans to provide services to empower policyholders to better control chronic conditions and thereby improving healthcare outcomes.
In RGA’s survey, 50% of respondents offer policyholders telehealth and e-prescription services, and another 45% are developing these capabilities, with telehealth on track to become a competitive pre-requisite.
The survey reveals that barriers to entering or developing an HIE do persist for many of these insurers, however. While engaging in ecosystems can help insurers achieve economies of scale and improve costs over the long term, initial costs to launch an HIE can be daunting. Insurers ranked budget and resource constraints as the highest obstacle to participation in an HIE. Other challenges include finding the right people and partners to participate and overcoming legacy underinvestment in operations and information technology infrastructure.
For a growing list of insurers, the potential of HIEs to transform healthcare makes overcoming these challenges worth the effort. HIEs could provide data necessary to fuel innovation in health insurance product design, an area in urgent need of new approaches.
Rather than just competing to offer the highest sum-assured, insurers could partner to offer remote and digital services to address unmet needs. For example, mental health services, which are not covered by most health plans, could be offered as part of a holistic insurance package via digital platforms, enabling insurers to provide needed services without taking on additional risks. New forms of data could also make underserved populations, such as the elderly, insurable at lower costs, as well as facilitate remote care interventions to improve quality of life.
HIEs could provide data necessary to fuel innovation in health insurance product design, an area in urgent need of new approaches.
The many touchpoints along healthcare journeys generate massive amounts of data. If leveraged effectively and responsibly, insights gained from this data trove could enable development of more consumer-centric insurance products and promote better health outcomes. Moving forward, however, data integration is essential. Only then will insurers benefit most from an HIE by gaining a comprehensive view of it, rather than see only incomplete, siloed data sets. RGA’s HEIDI (Health Ecosystem Integrating Digital Innovations) was created to address this need. HEIDI provides the unique functionality to link insurer data and all health services data within the HIE. The result is a single digital health footprint. This footprint can fuel product enhancements such as wellness programs, chronic disease management, and other customizable services.
Through such digital innovation, HIEs offer opportunities for companies to remain relevant and competitive and for customers to better manage their health. HIE solutions can also promote customer retention, enhance brand loyalty, and ultimately change the way consumers interact with their health insurers.
At RGA, we are eager to speak with clients about any support needed as the industry evolves. Note: While the survey referenced in this article is specific to Southeast Asia, RGA is now launching the survey globally to provide global insights and best practices.
