Article Synopsis :
Can data-driven innovations, working across an internet of connected things, personalise health insurance prices? That is the basic premise of this lengthy, but fascinating, academic paper.
Pulling the plug on the pool
Wearable technologies that track an individual’s behaviour have been seen as an opportunity to revolutionise healthcare by some, and a threat to traditional risk models and healthcare provision by others.
If the individual replaces the group as the basis of risk assessment, there are going to be social, economic and political consequences.
The pooling that is a part of all health insurance schemes – even those that are identified as private or commercial – will be disrupted. And this risk pricing is incompatible with structures that currently define what health insurance is and looks like, how it is regulated and then ultimately, delivered.
Not so fast
There are limits to how these innovations may be deployed, says the paper. While the use of wearables may be seen as a redistribution of responsibility from the state to the individual citizen, that may not be possible in all existing private healthcare structures in the United States.
The paper looks at how individual pricing may not be possible under ‘Obamacare’ and looks more closely at the forces at play – commercial, political and regulatory – in health insurance markets.
Not there yet
It goes on to look at the obstacles to moving towards a structure that allows individual pricing. It also examines the potential implications of the average US citizen’s health insurance payments changing on a daily basis, rather than annually all because of a fancy pedometer attached to the individual’s personality.
Mining the data generated by wearables may allow insurers to price policies more accurately – personally, even. It may even help modify consumer behaviour for the benefit of the insurer by creating a better understanding of risk and the consumer by assisting them to live a longer life in better health. But there is still some way to go before this is the conclusion we can expect to arrive at.
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Digital Insurer's CommentsWearable technologies would appear to be key to unlock the difficulty of risk pooling in healthcare systems.
This paper acknowledges the many benefits the data may offer the industry in the US. It also highlights a number of structural, political and commercial obstacles that must be addressed if this innovation is to transform healthcare.
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