By Jonathan Phillips · May 17, 2022
6 minute read

Health insurance: the impact of COVID-19 on health services

International Nurses Day

The last few years have had a tremendous impact on the practicality of providing healthcare to the general public, driving a rise in virtual diagnosis and remote services. Reflecting on International Nurses Day last week, Jonathan Phillips looks at the inevitable impact this will have on the health insurance industry.

Jonathan Philips, Sales Director Insurance UK, FintechOS
Jonathan Philips, Sales Director Insurance UK, FintechOS

The health insurance industry can’t ignore what’s happening in healthcare for long. The world has been changed by the impact of COVID-19, but nowhere is that more true than in hospitals and doctors’ practices. These changes must be reflected in the way we provide health insurance.

International Nurses Day this year rightly celebrated the bravery and dedication of our healthcare heroes in continuing to provide essential health services while at risk from infection at the height of the pandemic. Yet, we must also do better by the doctors and nurses who provide essential care, and the way to do that is through new health insurance technology.

The rise of digital health insurance during lockdown

During lockdown, the outlook was grim. Life insurance claims rose dramatically, as you may expect, but health insurance claims on critical illness policies actually fell, as people were simply unable to get a diagnosis. Many sadly passed away before being able to make a claim, let alone receive the care they were entitled to.

Source: ABI (taken from our report "a Leap into the future of… insurance")
Source: ABI (taken from our report “a Leap into the future of… insurance“)

It was fitting to reflect on this during International Nurses Day, as we consider the backlog of claims assessments medical practitioners were asked to work through under intense circumstances. This pressure must be relieved in future.

In an attempt to combat the situation, health insurance turned to digital diagnostic services to fill the gap and ensure the critically ill are provided with the essential care their health insurance should provide. Non-critical patients, however, also benefitted from the convenience of new technology and remote diagnosis.

Even before the pandemic, hospital closures and cut-backs often meant patients would have to travel long distances to reach essential care. Now the public has tasted remote diagnostics, it’s unlikely patients and insurance customers will be happy to accept a need to return to long travel for in-person appointments when a video call could be as effective.

Customers will certainly not accept missing out on critical care because of a lack of digital technology. Indeed, a PWC survey shows 41% of customers would switch provider due to a lack of digital capability under normal circumstances, let alone when it comes to medical treatment. Accenture, meanwhile, found that 37% of Millennials and Gen-Z were already dissatisfied with the location and channel of their healthcare.

Health insurance is already exploiting remote insurtech

This leaves the health insurance industry in a position where they urgently need to upgrade their digital services, and that necessity won’t go away as the pandemic fades into memory. Still, econsultancy research shows the healthcare industry is continuing to fall behind in digital services.

Graph, source: econsultancy (taken from our report "a Leap into the future of… insurance")
Source: econsultancy (taken from our report “a Leap into the future of… insurance“)

The issue clearly isn’t just with health insurance, but with the whole healthcare industry. Wellness is an essential service, rather than a profit-making one, and investment in digital transformation seems to be low on the priority list, likely due to concerns over return on investment.

Yet, the pandemic has shown that improving healthcare infrastructure is far from a ‘nice to have’ benefit. Properly arming nurses and doctors to do their jobs is the bare minimum we can do for International Nurses Day. Not to mention, health insurance providers who are eschewing the old ways and supporting the new normal are already taking advantage of remote insurtech to win in the market:

Policy Genius: embracing big data

Meanwhile, New York-based Policy Genius has taken this one step further by applying remote diagnosis to their screening process. Using advanced data analytics, the firm augmented its risk-assessment process to the point where it no longer required medical screenings from customers before approving health insurance.

Using past medical and prescription data, Policy Genius is able to screen and onboard customers to third-party policies with accurate risk calculations. Other companies, like the UK’s Vitality, are running with this trend and using similar data to determine renewal costs and premium reductions.

Vitality: wearable telematics

Vitality offers its customers reduced premiums for proving they are looking after their health by wearing fitness trackers linked to their insurance. By associating risk with accurate data, Vitality can offer reductions to policy holders at lower threatmof illness.

This also serves to gamify insurance, encouraging customers to earn their premium reductions. Using competitiveness to drive policy holders to better behavior has been shown to drive sales increases across many industries. More than 70% of companies using sales gamification tools, report 11% to 50% increases in key sales performance metrics, according to Centrical.

Putting health insurance in the present tense

Relating all of this back to the post-COVID world, the key here is to put your product where your customer is, rather than making them come to you. Give them an app, give them video onboarding, let them upload their medical history, have doctors call them to do health assessments, and give them a fitness tracker to track telematic data for you.

Doing so puts insurance products in the present tense. Acting as a wellness partner for life encourages young consumers to take out care now, rather than as they age and the chances they will need to claim rise. Convincing Gen-Z that having health insurance as a fallback should be easy now we have spent the previous few years living through the unthinkable.

All insurers need to do is to make sure their products and services are ready to reach consumers is make sure they have the right technology. Teaming up with the right insurtech partner can make this innovation natural and straightforward, not to mention put insurers ahead of their less digitally savvy competition.

Particularly, as another International Nurses Day passes, we should also consider what we can do to ease the strain on nurses as they work for our health. Remote diagnosis tools offer them safety and ease their workload. Good for patients, good for nurses, good for health insurance providers.

To find out more about what the right insurtech partner can do, book a meeting with us.

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