Thoughts on Insurtechs

“Your ship can’t come in if you don’t send it out in the first place.”

But ships don’t sink because of the water around them; ships sink because of the water that gets in them.? The ship must be designed and chosen appropriately for the journey, and if the ship and the journey are mismatched, the outcome is inevitable.

Many insurtech companies are struggling to stay afloat.? These are companies which approach healthcare primarily using technology, data analytics and machine learning to achieve efficiency and cost savings, attempting to change the healthcare delivery paradigm – a paradigm that is without a doubt in need of a refresh.? The public struggles of a litany of companies provide ample evidence.? Some of these companies are no longer offering coverage and are out of business; some have had their assets seized or sold; and others, while still standing, have yet to generate a margin.? We can speculate over their business plans, but we are seeing clearly that technology alone is not the answer to evolving our healthcare system.

We’re familiar with the over-valuations and venture capital “frenzy” of the past few years.? While there were many forces in play leading to this activity, without a doubt, COVID was a significant and unpredicted disruptive event.? The pandemic gave rise to opportunity for many intelligent individuals with worthy ideas.? Yet there is tremendous inertia in healthcare – as we could expect from a sector comprising roughly a fifth of our economy with vested interests galore.? Perhaps I’m being a little cynical, but as quickly and flexibly as our industry was able to pivot to maintain cashflow, it was just as facile in reverting to the old paradigm as soon as it could.

But this exposes certain irrevocable facts about healthcare.? To paraphrase former US House Speaker Tip O’Neill:? all healthcare is local.

There is a point at which the benefit of access to healthcare information stops and the “laying on of hands” must start.? ChatGPT still cannot, as far as I know, perform an appendectomy or actually write the prescription it recommends.? Even the most brave and innovative physicians must still carry medical malpractice insurance and recognize there is liability and are areas in which they should not venture in a purely virtual world.

Our challenge is to separate the wheat from the chaff – where are the legitimate opportunities for insurtechs (or technology overall), and what are those opportunities in which technology has its insurmountable limitations.

There’s a lot we can do to inform and enable care and get as close as possible to actually providing care as possible without stepping over the line.

COVID showed us there are options and the common thread in these options is human contact.? Indeed, there may be more options in the site of care; this is just an expansion of a trend that started in the 1980’s as more and more care was delivered in the outpatient setting.?

Just as companies such as DoorDash and UberEats have institutionalized the delivery of food to our homes (the “outpatient setting”) which was once the sole province of the individual restaurant, healthcare innovators and disruptors are doing the same with our healthcare.

There are multiple companies that now bring acute, behavioral and palliative care into the home; remote patient monitoring gives patients individual nursing attention, triage and physician referrals based on daily “visits;” and countless others bring care to patients more conveniently than most realized was possible (or providers were willing to admit) prior to the pandemic.? Think about it – if your favorite restaurant was only open 9-5, Monday through Friday, how often would you go there for dinner?? Yet this is the choice we’ve given our patients when it comes to receiving the care we implore them to get!

Are the above-mentioned programs successful?? Without a doubt!? When appropriately used.? My own personal experience creating an in-home suite of services at one of the health plans where I was chief medical officer showed a reduction in acute-care hospitalizations of 34%, and a 4:1 ROI in reducing low-value care – particularly at end-of-life.

COVID sparked a grand experiment.? The insurtechs naively rushed in with the anticipation of finding a brave, and profitable, new world.? They went to the open sea in boats better suited to different waters.

We have a lot to learn.? Technology will be an incredible enabler, but it is not a panacea.?