Insurers meet intermediaries meet NHI on the digital tech battlefield
Rapid advances in digital technology have the potential to change the accessibility and affordability paradigm across the financial services sector. This is especially true in the complex and costly healthcare sector, where digital innovation introduces sustainability challenges for insurers and intermediaries involved in the life insurance and medical schemes environs. A panel discussion at the recent African Insurance Exchange (AIE 2024) sought to make sense of the pending tech-driven healthcare revolution.
Accessible, affordable, quality care
“Digital health has transformed the health insurance space by lowering costs; driving better access; and increasing the quality of care,” said Ana Endres, Chief Digital Officer at Discovery Health, to open the discussion. There is nothing new about the digitalisation of healthcare and health insurance; but over the past decade, technology has become pervasive in areas like diagnostics, screening and treatment, to name a few. For Discovery Health, one of the major technology-backed ‘wins’ has been in bringing hospital-level care to the home, leading to a 30-45% cost saving per event, and improvements in ‘hard measures’ such as post-event recurrences or ER visits.
The challenges that insurers and healthcare providers must navigate include the slow adoption of technology by insureds, especially among older medical schemes members, and the apparent inability of the regulatory framework to keep up with innovation. As stakeholders increasingly turn to technology to drive consent engines and process patient information, they also risk tripping up over data privacy regulations. This writer reckons the Europe-wide General Data Protection Regulation (GDPR) and South Africa’s Protection of Personal Information Act (POPIA) must cause sleepless nights for Fintech and Insurtech start-ups.
Doug Rix, Head Underwriting R&D at Swiss Re, steered the conversation towards how technology could improve early diagnoses, potentially reducing the mortality and morbidity experiences of insurers and reinsurers. And it soon became clear that technology will revolutionise distribution, underwriting and product development in both the healthcare and life insurance disciplines. “Work has started on a simple blood test that can potentially detect over 50 cancers, many of which we currently do not have screening mechanisms for,” he said. “The ability to pick up cancer a lot earlier shifts your potential for good outcomes.”
How will insurers, intermediaries deal with NHI?
Conference host and panel moderator, Tumelo Mothotoane, took a brief break from technology to ask the panellists a tough question about the country’s recently-enacted National Health Insurance (NHI) Act. She deflected from the “exciting opportunities that come with healthcare digitalisation” discussion to ask what NHI would mean for insurers, intermediaries, medical professionals and patients. More importantly, she asked how insurers and other healthcare stakeholders would navigate the multi-year transition to a radically different healthcare framework? Endres noted that despite the legislation being in place, the discussion was ongoing.
“We are supportive of NHI; but we want to make sure that the Act includes the private sector and all [affected] stakeholders in it,” she said. This panel took place days before a High Court ruling that declared sections of the National Health Act unconstitutional, and there is a long list of NHI naysayers who reckon the NHI Act will face similar censure. But we digress. According to Endres, private medical schemes are desperate (not her exact word choice) for lawmakers to “enlarge one paragraph of the NHI to include the private sector”. She said that clarity around how the model would be funded, and its financial sustainability, would be useful too
Your writer has time-and-again lambasted the push for this legislation sans any sensible budgeting for same. But Rix was optimistic that the conversation would take place. He offered countries like Brazil, Ghana and Mexico as examples that South Africa could learn from. “There are things that we need to learn from [their solutions] so that we do not repeat the same mistakes; if we look at those lessons [it will] put us in a better position to execute on this plan,” he said. Lucky for this panel, your writer did not have a microphone. For some post-debate devil’s advocating, one might have preferred government and private sector stakeholders to have these discussions before NHI was signed into law.
Many, many questions remain unanswered
Assuming the legislation beds down more-or-less unchanged, can digitalisation help? And how do insurers and healthcare brokers address the digital divide to ensure wider access to an emerging digital healthcare system?
According to Endres, a simple smartphone-based journey via WhatsApp has huge potential. “Sometimes just putting our journey on WhatsApp creates more engagement than having [the solution] on an app or website,” she said. The observation here was that accessibility aspects might be easier to address than affordability. “For people who are struggling to keep themselves in health insurance products ... digital health is allowing solutions that can be accessed at a cheaper price,” Endres said. Hmmm. Post-event, these affordability focused comments offered further pause for thought.
Have we entered a Kafkaesque world where insurers are actively participating in their demise, or standing by and watching as their relevance declines? If the NHI does not squeeze healthcare insurance providers out of the market, then digitalisation will. Irony upon irony, dear reader. On the one hand, medical schemes have been broadly supportive of an NHI that renders their services, and the services of thousands of healthcare brokers, obsolete. On the other, these insurers and reinsurers are investing in technology that will make medical services more affordable, reducing the need for insurance.
Mothotoane pressed the issue, asking the panellists whether insurers could leverage digital solutions to address the disparities and inequities that exist between South Africa’s private versus public healthcare sectors. Rix opined that digital healthcare innovation was typically focused on consumer experiences and outcomes rather than insurance products. He added that early detection enabled by technology was useful in systems such as the NHI. “We are getting much more into early diagnostics and preventative healthcare,” he said. “If you can start treating illnesses cheaply and more effectively, they are not as disruptive to policyholders.”
Balancing affordability and profit
The moderator was on form, asking how insurers achieved balance between affordable healthcare, digital innovation, and profit. “You cannot just take an innovation that seems promising and push it to market; you must do so responsibly [and] make sure that it does not detract from the quality of care,” Endres said. She singled out digital health innovation as useful in normalising health and life insurers’ claims ratios post-pandemic. The lasting impression from this panel was that the integration of digital technology in healthcare may yet prove to be a double-edged sword for insurers.
On one hand, it offers the potential for cost savings, improved care and broader access to healthcare; on the other, it presents existential challenges as insurers adapt to a landscape where traditional models may become obsolete. The discussion at AIE 2024 highlighted both the opportunities and the hurdles that lie ahead. As digital health continues to evolve, insurers will need to balance innovation with responsible implementation, ensuring that they remain relevant and effective in a rapidly changing environment. The path forward hinges on collaboration and careful planning, and a commitment from all stakeholders to leverage technology in ways that benefit all.
Writer’s thoughts:
It looks increasingly tough for healthcare-focused intermediaries to plan for their futures. Do you think healthcare brokers will survive the dual onslaught of digital technology and the National Health Insurance Act? Please comment below, interact with us on X at @fanews_online or email us your thoughts editor@fanews.co.za.
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