Health Insurance: A Paradigm Shift in Strategy

Finding a fine balance between selling insurance, ensuring access to care and coordinating care outside of hospitals

Burden of Healthcare in Asia

The burden of healthcare is mounting in Asia, even in developed countries like Singapore with its universal healthcare model, a well-funded healthcare system and excellent medical infrastructure and professional training. In the less developed countries, access to medical care is a significant challenge. With the lack of universal healthcare models and health insurance penetration, the burden falls on government and individuals, who pay out of pocket.

Across all countries in the region, regardless of the level of development, healthcare inflation is exceeding average inflation rates, there exists an unequal access to healthcare, and Non-Communicable Diseases (NCDs) such as cancers, diabetes and dementia are causing the biggest burden to the system. Compounding this situation is an ageing population, and the development of healthcare infrastructure that hasn’t kept pace with the growing demand for treatment and care. Access to appropriate healthcare hence has become the pertinent issue in the region.

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Access to Healthcare in the region

Issue with access to care could be defined as follows:

1.???? An insufficient number of public health facilities, where queues are long and service is slow. Patients are encouraged and incentivised to subscribe to private healthcare services, which is more expensive, hence unaffordable. This is the situation in developing economies such as India as well as developed geographies like Hong Kong.

2.???? An overall shortage of medical infrastructure, particularly beds. The bed ratio in even developed Singapore is below par, averaging 2.1 to 2.3 beds per 1000 patients, and may move up to 2.5 with the current ‘HealthierSG’ plan by 2023. However, even the 2030 target state compares unfavourably to bed ratios in more developed aging countries in the region, such as Japan and Korea which average 13.0 and 13.2 beds per 1,000 patients respectively.

3.???? The shortage of medical manpower. For example, India has a severe shortage of healthcare professionals. Doctor-to-patient ratio in the country stands at 1:~800. The opening of new nursing and medical training colleges and efforts to stop the brain drain in the medical fraternity are steps in the right direction but these are measures that will take years if not decades to produce the desired outcomes.

4.???? The lack of quality care. This is particularly the case at primary care level, i.e GP / polyclinic, where there is neither a system of value-based care nor quality standards for patient outcome. This drives patients to tertiary care as the first port of call, and therefore conditions that could have easily been managed at primary care take up bed-space and resources at tertiary care facilities, which further burdens the system. Treatment-oriented healthcare in even developed geographies like Hong Kong and Singapore are facing significant health expenditure exceeding economic growth.

5.???? The unequal distribution of medical facilities and manpower. In India, for example, 70 percent of the population lives in the rural areas, but 75 percent of tertiary medical facilities and 80 percent of medical professionals are based in the urban centres. Countries like India, Indonesia and the Philippines which are large, geographically spread out and where large pockets of the population are not connected to cities or the larger mainland, healthcare service distribution is a much larger challenge.

The solution to the above situation lies in departing from treatment-oriented healthcare and into preventative healthcare and early detection and management. Where treatment is necessary more patients can be managed at primary care level or offered home-based care.

Such an approach requires care coordination across primary, secondary and tertiary level providers, and will involve patient, caregiver and/or family members as well as community facilitates. To do this well and at scale, the use of technology is key.

The changing role of Private Insurance and the benefit of that change

While governments are working on the strategic allocation of public health expenditure, and devising and executing better strategies for health education and coordination, many have been slow to acknowledge the role of the private insurance sector, a critical part of this ecosystem. Our role can extend well beyond being the payer for treatment for the wealthier segments of the population that can afford private health insurance.

Starting with our own policyholders and prospects, health insurance companies could supplement government efforts to reduce the demand for tertiary-level care without compromising patient outcomes.

Training and technology will be tools to achieve better policyholder health. The ?health insurer is in the ideal position to take on this role, as a strategy of keeping policyholders in good health for as long as possible at a time of increasing life expectancies across the region is aligned to the Life and Health industry’s key business objective of maintaining profitability and healthier books.

The following would form the strategy for Life & Health (L & H) to keep their customers healthier for longer:

1.???? Promoting health education among and creating communities of people-at-risk along with their caregivers. A study on ‘patient engagement and quality of care’ carried out in 2018 recognised the positive impact that education and regular engagement with patient and caregivers had on outcomes. Their receptiveness of care protocols including vaccinations and better adherence to those protocols led to better outcomes. Health insurance companies could also be providing vaccinations as part of customer engagement and lead generation.

While government-led public education campaigns undoubtedly create disease awareness within the wider community, ensuring compliance with preventative care plans, screening for early detection and condition management plans require regular engagement and nudges to ensure greater success. Insurance companies are in a position to manage their policyholders and potential customers remotely, as well as create communities, with the aid of appropriate technology.?

These initiatives would firstly motivate policyholders and prospects to take control of their health situation, and secondly with greater information and the help of support groups, help prevent the onset of Non-Communicable Diseases (NCDs).

2.???? Supporting and funding of early detection and intervention. Several of the Life and Health Insurance companies in the region have packaged complimentary annual or biannual health screenings with their products for policyholders. However, the uptake and follow-up on these screening benefits has been disappointing. The ability to nudge customers towards regular screening and quick and appropriate follow up could assist in ensuring early detection and intervention, thus addressing escalation of condition into comorbidities, and in the process bring down the need for expensive long-term chronic disease care at tertiary medical institutions.

3.???? Supporting and funding training and technology for care coordination and remote care. This is for policyholders who have been diagnosed with a chronic condition and already have co-morbidities. While hospital-based care is essential at this stage, not all aspects of the treatment protocol need to be managed at tertiary care level. For step-down care and coordinated care to work, medical, non-medical staff as well as the community and caregivers need to be trained. Technology will serve as the enabler for this, particularly for scale. This effort will be a combination of the following:

a.???? Training of primary care medical staff to co-design care plans with patients and caregivers

b.???? Training of more cost effective non-medical staff to be healthcare coordinators

c.????? Setting up infrastructure and tools for remote monitoring of health conditions

d.???? Designing and delivering digital therapeutics to policyholders to supplement care and ensuring regular engagement

With the above, health insurance companies also need to consider product innovation. Data-led and customised health insurance products, including User Behaviour Insurance have been piloted in more mature jurisdictions. I will discuss this in greater detail in subsequent posts. ?

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A combination of innovative health insurance products and the extension of insurer-supported health engagement will further help to differentiate the health insurance company, effectively changing their role from being purely the payer to becoming the healthcare partner, and with this the following outcomes become possible:

1.???? Reduce the burden on the healthcare system by managing conditions in a more cost efficient manner, and preventing the escalation of chronic conditions into multiple co-morbidities.

2.???? De-risk the company’s own portfolio while maintaining better health amongst its policyholder base. This is more important in countries where the population and books are rapidly aging.

3.???? Create a differentiating proposition where the company is seen positively as one that partners with its customer through their health lifecycle and a company that truly cares. In an era where brands that stand for a cause beyond profits are preferred, particularly by younger customers, the differentiation and a clearly established position as an insurance company that goes beyond what they ‘typically do’.

The recommended programmes can be carried out through the redirection of marketing and agency training dollars at minimum. Some of the cost may also be defrayed through a differentiated incentive structure for Agents, in return for qualified leads and better engagement rates with customers. I will discuss this in greater detail in subsequent posts. ?

The need of a specialised agency force

For this approach to be successful, health insurance companies need to deliver this value proposition to their existing and prospective customers, and it has be built into the sales strategy and communications.

Current agency-led sales do not necessarily upsell the value proposition of any of the value added services as a differentiator. They are also not able to engage with customers on personal and family health-related matters. This could change with bringing on board and / or training a specialised health insurance sales force.

This effort needs to be supported with a differentiated incentive structure and an option for product configuration, and/or with a different incentive structure focusing on the quality of lives.

These specialised agents will be trained, amongst other areas, to support their customers in their health journeys on the following:

1.???? Conduct a Health Need Analysis, much like a Financial Needs Analysis, as a first step to recommending the right health and wellness policy

2.???? Upsell the health enhancement and treatment options as a proposition, supported by the purchase of health insurance.

3.???? Engage with customers regularly to subscribe to the various value-added services, including educational seminars, support group meetings as well as sign ups for vaccinations.

4.???? Introduce customers to the various care plans and digital options when signing up for a policy, when there are updates and when the customer needs the plans.

5.???? Potentially be the non-medical staff that supports remote monitoring of care and outcomes using medically approved questionnaire, to further build relationships with customers (Note: this function can be carried out by non-medical personnel if trained by a medical professional using approved condition management protocols.)

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