Read the latest edition of AIR and MEIR as an Interactive e-book

Mar 2021

The Geneva Association - Digital health: Is the euphoria justified?

Source: Asia Insurance Review | Jan 2021

Global healthcare expenditure is projected to rise from $9tn to $24tn between 2014 and 2040. The world will be short of 18m health workers by 2030 and by 2050 16% of the global population will be over the age of 65. These demographic shifts and the resultant rise in chronic illnesses, coupled with the ongoing pandemic and squeezed public budgets, mean health needs are unlikely to be met solely by a bricks-and-mortar health system. Digital health is seen by many as the solution to creating health systems that are agile, efficient and fit for the future, says The Geneva Association’s Ms Adrita Bhattacharya-Craven.
Insurers have been slow to adopt digitalisation and most digital health solutions currently target consumers directly. Though the status quo is starting to change, as more health and life insurers look to harness this nascent market, some important gaps remain in both evidence and practice. Against this backdrop, The Geneva Association conducted a literature review and qualitative survey involving 11 insurers and 20 digital health providers to explore perceptions, gaps and opportunities in the market.
The digital health landscape
The digital health market is set to quadruple to nearly $400bn in 2025, spurred by factors including improved access to affordable care, rising consumer expectations in a tech-enabled environment and efforts to control the spiralling costs of care. The availability of granular information on the supply-and-demand-side characteristics of digital health varies by product and region, but common headline characteristics include:
  • Surge in Asia. Funding for digital health in Asia has doubled from $808m in the first quarter to $1.66bn in the second quarter of 2020. China is leading the way, with a sharp rise in telehealth seen during recent months. Countries with fewer resources across Asia (and Africa) have adopted digital health in areas ranging from financial protection to primary healthcare, often aided by a growing penetration of mobile ‘phones.
  • A profusion of mobile apps. An estimated 200 health apps are published every day, often with limited regulatory oversight. Wellness apps dominate, but apps for specific health conditions have gained in importance in recent years. Mental health, diabetes and cardiovascular diseases (CVDs) are the most popular intervention areas.
  • Growth in the use of telemedicine, triggered by COVID-19. McKinsey estimates 46% of consumers in the US now use telehealth compared to just 11% in 2019. In contrast, and beyond COVID-19, telemedicine interventions in Europe have a strong focus on health conditions such as CVDs, diabetes, chronic obstructive pulmonary diseases and obesity.
In a 2019 cross-continental consumer survey, 50% of respondents indicated that they use digital health to improve overall wellness, echoing global supply-side trends, and a survey of EU member states found that 53% of citizens sought health information online in 2019.
Effect on behaviour and health outcomes
Mobile apps, sensors and fitness trackers promise long-term behavioural change and are most effective when they incorporate the ingredients of behavioural change techniques (BCTs). However, a survey of mobile apps aimed at the wellness market found that few contained a balanced spectrum of BCTs. While there is some evidence of positive behavioural change when digital health enables goal setting or is paired with incentives, gamification and nudges appear to have mixed results. It is not clear how and to what extent high-risk/high-cost cohorts are represented in studies.
Some studies show favourable results when digital health is used for the treatment and management of certain chronic health conditions. Telemedicine fared better than other products, which is understandable given its conduciveness to complex conditions that require in-person intervention. The use of an online-offline mix of care is associated with better results when paired with incentives, but incentives promoting better behaviour and health outcomes lag behind, with the majority of initiatives focused on discounts and gadgets.
Consumer perspective – The most prominent themes
Relevance for health and life insurers – survey findings
Insurers may use more targeted online marketing and distribution to attract previously untapped cohorts or apply greater precision in underwriting using digital health data. However, the evidence examining such practices is scarce.
The nature of digital health utilisation across the insurance value chain remains skewed – most effort is concentrated in marketing and distribution. While there are innovations further down the value chain, many have not achieved scale and maturity is low. Issues surrounding data interoperability and fee-for-service reimbursement affect insurers’ ability to use digital health more strategically.
Most respondents mentioned that their strategic focus was on increasing market share and improving distribution and consumer experience. While most insurers saw digital health as an opportunity to tackle non-communicable diseases, only a few indicated its usage to influence premiums and underwriting.
Most digital health providers either indicated that the majority of their revenue was generated from reimbursement by third-party payers or very little. Fee-for-service appeared to be the most prevalent payment method. Insurers and providers mentioned challenges with the availability of resources to accelerate digitalisation, a lack of prioritisation, difficulty changing mind-sets, legacy systems and readiness in distribution channels as common barriers.
The maturity of digital health application across the value chain
The digital health market remains fragmented and most players are yet to adopt a holistic approach towards digital health. Six areas where insurers can help shape the market to optimise societal benefits alongside realising new business opportunities are proposed.
Articulate a holistic digital health strategy. There is limited insight into whether digital health is being used systematically to address cost drivers, lower premiums and claims and extend coverage to those at risk or in need of care. A more holistic appraisal of the business and societal opportunities for health and life insurers is needed.
Marshal the evidence prior to purchasing digital solutions. Insurers can move away from being reactive risk managers/simple claims payers to actively supporting insureds in managing their health by 1) investing in detailed claims analysis so that digital services can be targeted at the right population cohorts; 2) collaborating with digital health companies and academia to develop standards for evaluating digital health products.
Align payment incentives. If digital health providers begin to share some of the risks of rising health costs through value-based reimbursement methods they may be incentivised further to develop more efficient service offerings. These could aim to encourage the integration of wellness and management initiatives across a wider population segment.
Prioritise trust through voluntary charters. The growth of digital health is largely dependent on the willingness of consumers to share private data. Building trust will require a more personalised approach and softer, consumer-centric action. 
Recognise organisational context and improve capacity. Each insurer’s position on its path to digital transformation will need to inform specific goals, approaches and timelines in order to set realistic expectations. Organisational impediments and support systems need to be considered and dedicated investment to improve capacity may be required before engaging with wider health system stakeholders.
Create a digital health marketplace. A shared marketplace that brings relevant digital and in-person solutions together, with outcomes, quality and affordability at the core, can facilitate a much-needed dialogue across companies and encourage rationalisation of products by creating common standards, effectively leveraging experiences and having a unified voice while working hand-in-hand with governments on crucial topics like data and security.
Ms Adrita Bhattacharya-Craven is director health and ageing with The Geneva Association.
The Geneva Association logo
Full report available at:

Note that your comment may be edited or removed in the future, and that your comment may appear alongside the original article on websites other than this one.


Recent Comments

There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.