How Smart Technology is Bringing About Change in Health Insurance

JP Wieske
September 20, 2022

Most of us are familiar with how banking has changed as a result of fintech (the use of technology in banking. We no longer need to leave our house or interact with a person to deposit checks, buy stocks or apply for loans. We have real time data on our purchases, withdrawals, deposits and balances. In short, we see that technology has made baking easier, more accessible and less expensive.

Will technology do the same for health care and health insurance?

There is hope as we watch developments in healthcare technology, wearable health devices and the use of technology in insurance.

Many technological changes have begun to change health care. Unified medical records have made it much easier to track patient care across different health systems. State laws have mandated prescription databases to help track problems like opioid abuse. Patients are interacting with their medical providers electronically – including everything from simple emails to full scale diagnostic visits. A number of legislative and regulatory barriers were removed temporarily during the pandemic which has further strengthened these changes. Patient management through technology allows health systems to better interact with their patients, follow their results, and to track their compliance especially with prescription issues. Artificial intelligence is even beginning to be deployed by some health systems to aid doctors in diagnosing conditions.

Insurtech – the use of new technologies and data in insurance – has begun to change insurance as well. Insurers have spent billions of dollars in deploying technology to make insurance better, more accessible and less expensive. Consumers have access to new insurance products, and many insurers are integrating new technology to make their lives safer. Many homeowner’s policies are integrating smart home technology including monitoring pipes for leaks, monitoring for flooded basements and new construction techniques that resist damage. Auto insurance companies have invested in technology to avoid distracted driving, teen driver tracking by parents, technology that rewards better driving and encouraging safer cars. By investing in these technologies, insurers are hoping to see fewer or less severe claims.

Some insurers have deployed new technology for health insurance adjacent products. Some worker’s compensation insurers are deploying smart devices on workers that monitor air quality, noise levels and can even use position monitoring to find areas where workers are routinely tripping. Long-term care insurers are studying how to help potential long-term care patients stay on their homes longer through smart homes—like monitoring whether or not the fridge has been opened or the shower used. In Medicaid, insurers are using technology to assist their clients with navigating not just the health system but also finding access to fresh foods. In all of these cases, the incentives are aligned. The insurer has an interest in reducing claims, and their expenditures can lead directly to savings. And in the case of worker’s compensation insurance, the employer is often willing to pay more to better protect their workers to ensure the workers are healthy and productive and to avoid potential liability.

The intersection of the “Internet of Things” (i.e. all of the wearable health devices) with Insurtech, and all the data available individuals through their medical records, and their online presence will lead to new artificial intelligence projects will lead to new products that better help consumers monitor their health in real time. Indeed, one AI company has claimed success in finding melanoma through an AI analysis of the individual’s medical records. As the technology continues to develop, there will be new and more successful efforts to diagnose and treat medical conditions. As the cost of the technology continues to fall, health insurer interest is rising and a number of health insurers are getting ready for a transition from being a health care financing entity to a healthcare delivery company.

Public policy needs to change with the changes in technology. Our ability to better track individual health with technology will have broad implications for public health, and we all followed the debate on COVID tracking. We have also seen significant equity issues that have (finally) begun to come to public’s attention. Technology is neutral and it can be used to exacerbate or reduce health inequities, and our public policy need to recognize that.

While I know medical professionals are tired of leading from the COVID battles, we still need your leadership on the use of technology.