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Health insurance providers: The winners of digitization in the health care system?

According to a study by management consultants Roland Berger, the market for digital products and services in the healthcare sector in Europe is progressing faster than previously assumed: By 2025, the European-wide market volume is expected to be around EUR 155 billion. According to the forecast, digital healthcare offerings will then account for around eight percent of total spending in the healthcare sector.

Guardian of the patient’s wealth of data

According to the report “Future of health: An industry goes digital – faster than expected”, for which 400 international experts from the healthcare market were surveyed, the health insurance companies, in particular, seem to be the winners of this development. According to the consultants, they will “play a much greater role in the future and will control their policyholders much more than they do today – for example, in terms of using preferred provider networks for diagnoses and therapies”.

About 80 percent of the people surveyed assume that this will already be the case in 2025. Health insurers benefit from the fact that they not only have an overview of the entire care chain but also have the greatest treasure of the digital age at their disposal: The comprehensive data sets and streams of their policyholders.

Almost half of the experts surveyed also expect that in the next five years, insurance companies will – on this basis – also offer digital diagnoses and therapy support themselves. By contrast, only around one-third expect that by 2025, medical insurances will succeed in significantly reducing the effects of lifestyle diseases such as diabetes or high blood pressure by directly influencing patients’ behaviour.

At the same time, seven out of ten respondents expect patients to share their data with medical insurance companies in order to obtain cheaper rates through a health-promoting lifestyle. In the UK, Vitality Health is the first private health insurance to offer discounts if data tracking analyses prove a healthy lifestyle. “All health insurance companies are working intensively on offering digital services,” says the Roland Berger study.

Pressure from the global BigTechs continues to increase

The pressure on the established companies in the healthcare sector will definitely increase in the coming years, as non-industry market players create competition and create entire ecosystems around them – for example by building their own care structures and pharmacies. These global digital pioneers and financially strong tech groups such as Amazon, Apple, Google & Co. are already launching initiatives to this effect.

Amazon, for example, has set up its own health insurance company together with Berkshire Hathaway and JP Morgan. A Facebook research department is working with the radiology department of the New York University School of Medicine on fast MRI, a research project on the application of artificial intelligence to MRI scans. These scans then generate high-quality images from limited data.

Apple also announced the start of three clinical trials with renowned partners such as the Harvard T.H. Chan School of Public Health and the University of Michigan. These involve tracking cycle data, evaluating auditory environment information and analysing movement and cardiovascular data using Apple Watch.

In view of this development, six out of ten of the experts interviewed for the Roland Berger study, assume that the BigTechs will be among the established players in the healthcare market in a few years’ time. “If these companies are able to retain their customers when it comes to very personal areas of life, such as health, an enormous lock-in effect can be created,” the study expects.

Smart patients are driving digitization forward

In the health care system, the “smart” patient is also driving digitization – in other words, the disruption is increasingly coming from the insured themselves. This is the conclusion of a recent study by the strategy consultancy Deloitte on behalf of the National Association of Statutory Health Insurance Funds (GKV Spitzenverband) in Germany, in which all statutory health insurance companies in the country are members with over 70 million insured persons. “Those who reach for a smartphone for almost every aspect of their lives do the same when it comes to their health. The boundaries between fitness and medical indication are becoming increasingly blurred,” the analysis notes.

What today can be worn on the arm as a wearable device may soon provide new insights as an implanted sensor and offer advantages in prevention, diagnostics and therapy, including monitoring. “Digitalization creates attractive analysis and control options with potentially positive effects on the quality of care and expenditure on services and increases the satisfaction of the insured with the statutory health insurers,” according to the Deloitte study. At the same time, however, it warns: “If the GKV fails to actively seize the opportunities, other players could take over this role”.

New challenges for evaluation and approval

While classical medical technology or pharmaceuticals go through a product development process with clearly defined steps towards a final solution, digital offerings are often created in an agile approach. Above all, this means that the software is quickly tested in practice in order to gain the necessary experience and be able to carry out further tests. “The product is continuously developed and updated with short software release cycles – and in most cases, it is not final when it enters the market,” the study states.

This poses considerable challenges for today’s regulatory practice in the healthcare sector. “From the perspective of patient protection and the solidarity community, it must be ensured that any special evaluation procedures for digital healthcare offerings do not fundamentally differ from the proven and established requirements for drug or medical device innovations in terms of effectiveness, safety, and benefits for the insured or patient,” the study states.

At the same time, an overly rigid evaluation system should not lead to a situation where potentially beneficial offers do not reach patients. This would open up a broad field of activity for medical insurance companies in the future.

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