What’s driving transformation in the health insurance industry?

The healthcare sector is being buffeted by forces it has little control over.

That an industry is facing challenges is not new, and, after all, trials and tribulations have a wonderful way of forcing companies or entire sectors to modernise for the benefit of all. However, what goes on at the chrysalis stage is critical if the health insurance industry plans to go from caterpillar to butterfly.

Integration of technology is now a must for any industry looking to transform itself, and any board wishing to remain in the game must certainly reserve a seat or two for its CIO and CTO. The health insurance industry is no exception.

However, let’s cast our minds back to 2010 when Blockbuster, the video rental business, went bankrupt; put simply, it failed to adapt to the new normal. Today, one of the game-changers in streaming, Netflix, is valued at $35bn with 63% market share.

Blockbuster ignored market disruptive technology (streaming), lacked customer focus and underestimated the competition as it centered all of its activity around retail stores (and a “we’ve always done it this way” approach). In doing so, it missed the opportunity to be an early innovator with Netflix when the opportunity was presented in 2000.

The lessons are stark as health insurers face challenges of the new normal. Ageing and growing populations; the proliferation of chronic diseases; heightened focus on care quality and value; evolving financial and quality regulations; informed and empowered consumers; and innovative treatments and technologies — all of these factors lead to rising health costs and an increase in spending levels for care provision, infrastructure improvements and technology innovations.

For health insurers, it is no longer enough to be a payer of claims; they must provide a proactive, bundled health and wellbeing product approach. The evolution of the modern consumer, more than anything else, is having a direct impact on health insurers. The growth of mobile and wearable technology has empowered consumers to be in control of their health and their health information. People now have a far greater capability to manage all their health care needs from tracking blood pressure and glucose levels to buying and accessing policies.

Insurers have a fantastic opportunity to utilise this new wealth of data to bring new products to the market and take advantage of emerging gaps built around core state provision. Insurance is always at risk of becoming a commodity where people simply choose a provider on price. By being able to connect with customers in new ways and provide a proactive, personal and collaborative service, insurers can rise above that.

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https://i2.wp.com/www.xuber.com/sites/all/files/styles/user_mgmt/public/user_photo/zeki.pngZeki Tezer is the VP of Health Practice for Xuber. Connect with him on Twitter.

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