Healthcare Insurance Industry Threatened by Technology
The international healthcare insurance industry is under threat from digital healthcare. Technology enables us to detect cause and effect before we get sick, a British science and technology writer warns.
Tom Standage, digital editor of the Economist, was talking at the recent Pricewaterhouse Coopers (PwC) World in Beta conference, where he predicted, “data meets healthcare” would become one of the five “emerging technologies” that will shape the world in the future, and have a huge impact on the international health insurance industry.
DNA Sequencing and the Healthcare Insurance Industry
Standage used a chart to prove his point. He said the first human genomes (including DNA) had taken more than $3 billion to sequence – in a decade. But it now takes $1,000 to do the same in less than a 48 hours. This has had an enormous impact on the correlation of genes and diseases. And, clearly, on the healthcare insurance industry as well.
Drawing attention to digital devices we can wear, like Apple watches, Standage said in his address that it was now possible to identify susceptibility to disease and, by identifying probable symptoms, allow people to pre-empt illnesses. The healthcare insurance industry assumes we will all get sick at some stage. However, we don’t know when, this new, digitally based approach helps keep people well. This is, in itself, a much cheaper way of doing things.
He said that the traditional healthcare insurance industry would be unable to insure people who were susceptible to certain illnesses. And this, in turn, would mean that healthy individuals would ultimately end up paying “compulsory risk pooling”. He equated this to a national health type medical system in the UK and Europe. But this is “political kryptonite” in the USA. There the private healthcare insurance industry is well established, if controversial.
How Drug Companies Affect the Healthcare Insurance Industry
Standage identified a paradigm shift by certain drug companies, largely due to their drugs not working for everyone.
For instance GlaxoSmith Kline (GSK) made a drug for people with multiple sclerosis (MS) that affects the central nervous system. This drug only had an affect on about a quarter of the people tested, and so the US National Health Service (NHS) wasn’t willing to buy it. In an attempt to change the way the healthcare insurance industry would normally react, GSK said payment would only be required for patients who found the drug worked.
This, maintained Standage, was like selling an outcome rather than a drug. It was the data, he said, that would become “really valuable” because it would now be possible to “predict and optimize”, and then sell a service and outcome instead of just “a thing”.
And this is what he predicts is going to have a really major impact on the international healthcare insurance industry. Why? The focus will become prevention instead of cure or treatment.
Not Everyone Agrees the Healthcare Insurance Industry is Threatened by Technology
While there are undoubtedly important developments in the health industry, not everybody agrees with Tom Standage’s prediction
The founder of a blog titled Health Insight, 3G doctor, David Doherty is particularly critical, and he stated in response to Standage’s talk that many overestimate just how much health care providers are able to force people to change their behaviour.
If disruption occurs in the health insurance business model as Standage predicts, Doherty believes a lot of lawyers will get rich. And this won’t necessarily affect the healthcare insurance industry at all.