Insurers Can Lead Healthcare's Digital Revolution

Insurers Can Lead Healthcare's Digital Revolution

Health insurance executives who embrace digitalization and foster a climate of innovation have a tremendous opportunity to improve a healthcare system that is long overdue for an overhaul.

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Insurers Can Lead Healthcare's Digital Revolution

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Health insurers aren’t exactly known for being at the cutting edge of innovation. However, they now have an opportunity—a multibillion-dollar opportunity—to change that.

Insurers can play a leading role in bringing digitalization, the force that has disrupted so many other industries, to healthcare.

First, let’s be clear about what digitalization in healthcare is not. It’s not about the wholesale replacement of medical professionals by bots. It’s about digitally enhancing the customer experience so care is delivered more efficiently and more effectively.

Consumers want offerings, apps and devices that help them get better care and lead healthier lives, and they’re ready for their insurers to take the lead. More than 60% of insurance customers expressed interest in having their insurers offer healthcare services that go beyond standard insurance products, according to a Bain & Company survey of 172,000 customers in 20 countries.

There’s certainly plenty of scope for insurers to help improve the way healthcare systems work. Consider this familiar scenario:

It’s 7:30 AM, time to leave for work, but your three-year old daughter has developed two red, itchy blotches on her face. Is she sick, you wonder? Is it serious? Is she contagious? Looks like you’ll have to keep her out of day care and take her to the pediatrician, and who knows when you’ll be able to get an appointment.

But what if things could be done differently, more efficiently, with less time and less anxiety? What if you could use a smartphone app provided by your health insurance company to get background information on rashes, initiate a video consultation with your doctor and schedule an appointment with a highly rated specialist close by who can see your daughter that morning?

In some countries, health insurers already have begun offering such services. Using digital techniques, insurers can help doctors and patients get access to the most up-to-date and relevant information when making decisions about treatments.

Bain and Google have compiled a comprehensive portfolio of digital technologies relevant to health insurers. We've identified more than 100 business cases and quantified 30 with the potential to generate the most value in the next three to five years. We’ve grouped these applications under seven critical technologies.

The first is advanced analytics (AA). Insurers amass large amounts of data from different sources as they process claims. Using AA, they can develop sophisticated customer relationship management systems that help them provide targeted services and prevent churn. Insurers also can use their data, with proper privacy protections, to help doctors deliver timely, proactive and cost-effective care to patients, while avoiding redundant, and possibly conflicting, tests and treatments.

As customers become more comfortable with digital connections, insurers can use machine learning to help them complete transactions online that previously required human interaction. Other potential uses for machine learning include claims processing and fraud detection.

Many people already are wearing watches and other devices that measure their physical fitness by connecting them to the Internet of Things. As these biosensors get more sophisticated, insurers can offer them as important links in a healthcare system that increasingly emphasizes home-based treatment and the prevention of illness.

As insurers expand their non-insurance offerings, they can use online sales technologies, including social media, to better anticipate their customers’ needs. They can thus make cross-selling more effective.

Leading insurers understand that if they want to reap the full benefits of digital healthcare, they must help construct a powerful information infrastructure. Such a system can act as a clearinghouse for patients searching for information on doctors and treatments. As a repository of electronic medical records, it can help patients and doctors coordinate care, simplify the purchase of prescription drugs, and connect patients with one another.

When patients engage with the healthcare system, they often interact with multiple parties to treat a single illness. Using distributed ledger technology (DLT), all participants—patients, doctors, pharmacists and insurers—can securely access all information relevant to treatment. With the help of DLT, health insurers can precisely monitor and manage treatment costs.

In some countries, doctors are already using virtual reality to remotely diagnose and treat patients. In the future, patients needing orthopedic shoes, for example, will be able to use their smartphones to record a 3-D data model of their feet, which they can email to their podiatrists. Insurers will be able to access those same models when they’re evaluating patient claims.

According to our calculations, a typical German private health insurer that adopts digital technologies can increase revenues from premiums by 6% to 11% in the next five years and reduce costs by 15% to 20%. Across the entire German health insurance sector, digitalization can save insurers, healthcare providers and consumers billions of dollars.

Around the globe, health insurance executives who embrace digitalization and foster a climate of innovation have a tremendous opportunity to reduce costs and inefficiencies, improve their customers’ well-being—and lead the way to improving a healthcare system that is long overdue for an overhaul.

Henrik Naujoks leads Bain & Company’s Financial Services practice in Europe, the Middle East and Africa (EMEA), and is based in Zurich. Christian Kinder, who is based in Munich, is a partner in Bain’s Financial Services practice. Florian Mueller leads Bain’s Advanced Analytics practice in EMEA, and is based in Munich.


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