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Healthcare in Asia: A storm in the making!

Source: Asia Insurance Review | Mar 2018

Global Asia InsurTech Life & Health Regulation People

Asia Insurance Review speaks to reinsurers, insurers, brokers, health evangelists and medical management solution providers to understand the healthcare problems in Asia and the way forward. 
By Anoop Khanna
Healthcare in Asia is a perfect storm in the making. As the Asian economies develop and mature, economic growth brings in its wake rapid urbanisation, increase in income, changes in diets and lifestyles, lifestyles without exercise and rapidly ageing populations and consequential diseases and healthcare issues.
Healthcare landscape
People are living longer thanks to the advances in medical technologies, are more informed and are demanding more cure driven healthcare services. Yet, almost every Asian country is today grappling with a healthcare crisis. Soaring healthcare costs remain a major issue and a substantial percentage of population is pushed back into poverty due to skyrocketing out-of-pocket expenses on healthcare.
   Continuous efforts to make healthcare affordable and available to the general population, not withstanding, these problems are further compounded as “in Asia, each country faces a different set of challenges (and adopts different approaches) when it comes to healthcare,” said Mr Craig Ford, CEO, SCOR Global Life Asia Pacific.
   Mr Steven Conway, Regional Head of Health, Asia Pacific, Allianz, said: “Advances in medical care are exciting but expensive, and coupled with the demands of ageing populations, the public sector, particularly in Asia, is struggling to provide the required quantity and quality of healthcare required.” 
   Mr Mike Griffiths, Regional Director, Healthcare, Howden Insurance Brokers (S) Pte Limited, said the two most significant healthcare challenges in Asia “are access to basic healthcare in developing Asian countries, and chronic disease burden in more developed (Asian) countries.”
Health insurance can be a major player
Many Asian consumers either do not have adequate health insurance to protect themselves or have no health insurance at all, resulting in high out of pocket healthcare bills. 
   Mr Jerome Matrundola, CEO Life & Health Asia Pacific, Partner Re, said: “For consumers who have health insurance, many buy more generous benefits than they need.” This has two effects: the “buffet” mentality “that encourages people to use more healthcare services than they require and unaffordable premiums as people age since premiums on plans with more generous benefits escalate much faster than basic plans,” he added. 
   According to industry leaders, health insurance broadly has not kept pace with the changes happening in the medical and social fields. Policy wordings, exclusions, coverage eligibility have largely remained the same. They acknowledge that insurance companies have to be profitable and not look at subsidisation of risks yet there needs to be some level of innovation, new way of thinking of how healthcare is delivered and used. 
Adaptation to technology and progress should be quick
“There have been many new advances in technology that ensure the patient outcome is better and he/she is able to get back to productivity faster, but some insurers do not allow coverage or even partial payment viewing these as ‘experimental’,” said Mr Mohit Agarwal, Managing Director, Employee Health & Benefits, Affinity and Operations at Marsh India Insurance Brokers Pvt Ltd. 
   Mr Bhaskar Nerurkar, Head - Health Administration Team, Bajaj Allianz General Insurance, however had a different take in this regard. He said: “Insurers are creating awareness about the rising healthcare costs and the need to be adequately insured at par with the inflation every year so that they may not end up being under-insured plus we are innovating for a different experience for our health insurance customers.” 
   One option to make the insurers more proactive in this area is via more active roles in the local healthcare systems. 
“Clearly understanding what is currently provided by a state or public system and what is not, and looking at products that fill the gaps, can be a growth area for health insurers,” said Mr Alan Watts, Senior Vice President, Head of Global Health, RGA.
   “An ageing demography and the emergence of lifestyle illnesses in Asia are increasingly making the region’s health infrastructure less appropriate. Current health systems were created in the baby boomer era when medical institutions dealt with the in-and-out care of accidents and acute illnesses. Modern health, both for the chronically ill and ageing, is more about maintaining a healthy lifestyle,” said Mr Conway. 
   Insurers not only need access to granular health data but should also be using it proactively to manage claims, set reasonable pricing, and have constructive dialogues with providers that go beyond cost to also focusing on outcomes, treatment protocols, and quality of care.
   Mr Swami Swaminathan, chairman & co-founder, CIIQ Healthcare Catalysts Private Limited, looks at it with a different perspective. “All professionals involved in delivering healthcare and funding healthcare must believe in the fundamental theory of ‘compassionate capitalism’.” 
   “The tragedy is when it comes to private enterprise, healthcare is placed on the same platform as making money out of luxury goods & services,” he added. 
Collaboration is the key
Collaboration with government and all participants in the healthcare ecosystem is essential to create the efficiencies that are needed. Governments, regulators and providers need to work together towards a specific set of goals to reduce society’s and the public’s burden on healthcare costs. 
   Mr Conway said: “At Allianz, we are creating health journeys to drive collaboration with all ecosystem partners to provide continuing support for our clients, from health maintenance to diagnosis and outcome.”
   “While it is the insurance industry’s responsibility to provide a choice of solutions for different levels of the population, governments can facilitate this by creating tax incentives for insurers that provide appropriate access and solutions to the market,” said Mr Chan Keng Hong, Market Head Life & Health, Asia Pacific at Partner Re. 
   Governments can also play an active role by stimulating innovation in service provision and encouraging new players to come into the healthcare industry to provide fresh ideas on the delivery of healthcare. Government grants and regulatory concessions enable new methods of service delivery to be discovered and utilised.
   “Most governments in Asia have long prioritised economic growth over healthcare. It would require a substantial shift in priorities for most Asian countries to start spending substantially higher proportions of GDP on healthcare,” said Mr Griffith.
   Mr Agarwal said: “Governments need to incentivise those able to afford private health insurance, both individuals and employers alike, to purchase. This is usually through tax exemptions/relief. Also, health insurance needs to be made simpler with broader coverage, focus on prevention rather than treatment and a wider network of system partners.
   Mr Varun Gera, CEO, Health Assure, said: “A major public-private partnership that has broad representation from all stakeholders, including healthcare and insurance – is essential to draw attention to the importance of health promotion and disease prevention.”
Engaging with the customers
Another area that is growing is an increasing public awareness of preventive care. 
   Mr Vincent Lepez, Deputy CEO of SCOR Global Life Asia Pacific, said: “Many players in the healthcare ecosystem have long shifted the focus to preventive care and are working with respective governments and healthcare industry and delivering enhanced overall benefit to society.” 
   Technology greatly helps the progress of new product development, but Mr Lepez noted that “some product approval heavily depends on the support by local regulator/regulations”. 
   Mr Watts said: “Health insurers should be looking at different business models – primarily ones that can leverage strong customer engagement. Insurers can create a lifetime journey with clients by combining technology and a strong value proposition.”
   “They can, using their vast amounts of available data as well as the ongoing relationships with customers, help guide and navigate them (customers) through complicated healthcare systems,” he added.
Use of data
As for the use of available data, it is noted that most data privacy laws in Asia Pacific are very pro-consumer which makes it extremely difficult to supplement internal data with external data to create richer models and to identify new variables that can aid in product management. 
   Insurance industry, however, needs to innovate as if there is no tomorrow. Efforts must be made to commoditise healthcare with an oversupply of products and services to ensure accessibility and affordability. 
   “The players have to get innovative so as to bridge the health divide – leveraging the progress in AI and digitalisation. The world today has 500 petabytes of health data. In all likelihood, we will have over 25,000 petabytes by 2020. Estimates are that in next 10 years, data sciences will do more for medicine than all biological sciences combined,” said Mr Swaminathan.
Looking ahead
Mr Griffith said: “Looking ahead, the cost of accessing health facilities will also be set by the forces of demand and supply just like in any other industry. The really tough question for society and for governments in Asia is to decide how to deliver care to those for whom the market does not provide.” A 
The 3P healthcare landscape
Mr Jonathan Sternberg of Medix looks at how best to increase the efficiency and sustainability of the healthcare landscape.
The relationship between the insurance companies (payers), the medical institutes and practitioners (providers) and the patients is one that is often marred by competing, if not conflicting interests. 
   The payers often feel that they are being over-charged and mischarged and generally being taken advantage of. The medical cost inflation has made funding unsustainable. The providers feel that they are spending too much time justifying their decisions and are over-worked, treating patients for ailments that could have been avoided. The patients feel that they are simply not getting the care they deserve and are at a loss with the abundance of information and complex decisions they need to make.
Taking a different approach
While these feelings are all justified, this complex situation can be improved by implementing various measures and taking a different approach to healthcare. 
   Currently the healthcare industry still classifies patients according to their illness and seeks to apply a generic medical solution to each of them, but with advances in both medicine as well as digital tools, it is time to provide a more seamless and personalised medical journey. 
   Here are a few of the many steps that can be taken to increase the efficiency and sustainability of the healthcare landscape:
  1. Prevention: Just as important as treatment, there should be a re-orientation towards maximising health in a proactive manner at all ages. The cost of genetic sequencing has come down significantly, making it far more accessible. Subsequently, personal risk factors can be identified, and tailored prevention plans defined to prevent the onset of illness.
  2. Technology: Increased accuracy in triage, medicine dispensing, and continuous monitoring will coincide with the ability to remotely diagnose patients bridging the accessibility gap.
  3. Provision: Evidence based medicine, value-based care and personalised medical case management programmes will standardise the application of healthcare leading to better medical outcomes and optimise healthcare expenditure. 
  4. Transparency: Increased transparency and reporting on medical outcomes, especially in the private healthcare system will raise the level of trust and also help sustain costs, avoiding misuse and overuse while providing better medical outcomes.
   With these changes, the healthcare industry will benefit from increased efficiencies and better medical outcomes but most importantly, these changes are critical to ensure sustainability of healthcare systems in the years to come.
   Mr Jonathan Sternberg is VP Global Business Development & Strategic Partnerships at Medix, a global & leading provider of innovative, high quality, medical management solutions and recipient of the AIIA award for Best Service Provider of the Year in 2017. 
Engaging and rewarding consumers for healthy living
ReMark, a SCOR Global Life subsidiary, conducted a Global Consumer Survey in 2017 that highlights the potential of wellness, wearables and consumer rewards to revolutionise traditional insurance products and to create new value. 
   With the rapid development and lowered price of wearables, data collection and availability have been made easy. Based on these, insurers can play a role in promoting wellness and potentially offering rewards to encourage behavioural changes for healthier living. 
   With the support from its wellness platform/programme supported by  partners Garmin and WellteQ, there will be continuous positive engagement between insurers and customers to motivate consumers at a customised individual level to live a healthier lifestyle through the data they provide.
Global Consumer Survey in 2017
  • It was conducted with 8,000 insurance customers in 14 key life insurance markets including five in Asia Pacific (Australia, China, Indonesia, Japan and Malaysia). 
  • The survey found 49% of Chinese consumers own wearables. The high adoption is also supported by the projection from Chinese Consumer Survey Insights - 411 million smart wearable devices expected to be sold in 2020 in China alone. In addition, there is a high interest in acquiring wearables among Indonesian and Malaysian consumers.
  • The survey highlighted a deeper/broader engagement between Chinese consumers and their wearable devices because lifestyle improvement is a key driver: 90% of owners check their device daily and 68% input their data to device daily. 
   Based on information provided by Mr Vincent Lepez, Deputy CEO of SCOR Global Life Asia Pacific.
An Indian beginning
The Indian regulator IRDAI has formed a working group on innovations, particularly the application of wearable and/or portable devices in insurance.
   The working group will look at how technological advancements, particularly wearable and portable devices, may be treated from the point of view of risk improvement, risk assessment and use/distribution of such devices as part of policy design.
   The IRDAI has said in the context of both health insurance and life insurance, wearable devices could be used to measure personal fitness, incorporate a healthy lifestyle, among others. The individual health metrics will enable customised pricing for the policyholders.
Reinsurers can contribute to healthcare management
Reinsurers are often at the leading edge of product innovation, underwriting and risk management. They help provide protection in times of need and work with insurers to provide the best possible products to consumers. Asia Insurance Review speaks to four global reinsurers on how they look at supporting the health insurers to promote healthy living and building wellness awareness across Asia.

Building customer friendly digital journeys
“As reinsurers, we are hopeful that we can contribute in this effort by designing products and services that are relevant and affordable to the different sectors of the society. 
   In addition, we feel there is scope for reinsurers to assist insurers in building customer friendly digital journeys with ‘Buy Now’ offers to help grow market penetration.”
Mr Jeff Cook
Head of Underwriting & Claims, Product & SE Asia Marketing, Pacific Life Re Asia

Investing to provide data analytics services, deliver improved solutions
“As a reinsurer, PartnerRe is well positioned to facilitate the efficient transfer of knowledge and know-how within markets and between markets in terms of pricing, structuring and underwriting of health insurance products, as well as in claims management and data analytics.
   At PartnerRe, for example, we are investing in providing data analytics services and using capital to either alleviate the burden of distribution costs or working with third party service providers to deliver improved solutions to insurers to help them better service their own customers.”
Mr Jerome Matrundola
CEO, Life & Health Asia Pacific, Partner Re

Reinsurers have the economies of scale to benchmark best practices
“Healthcare is a dynamic field with constant change around disease, provision of care, increasing costs, and a changing political/legal environment. Furthermore, in recent years, the advent of digitalisation in healthcare has opened up new challenges across the whole spectrum. 
   In this scenario, the health reinsurers can provide support to health insurers that increases their ability to take on risk. Cancer Medical Reimbursement products are one good example of this. 
   Size does matter in health insurance: reinsurers can pool clients to achieve better deals from health service providers and even pharmaceutical companies. And reinsurers have economies of scale in relation to data and experience from multiple insurers in market, allowing for benchmarking of experience and best practices.”
Mr Alan Watts
Senior Vice President, Head of Global Health, RGA  

Developing product and service solutions that align with consumers’ healthy living inspirations 
“SCOR Global Life believes in partnering with key stakeholders such as insurers, technology and data analytics companies to develop solutions and innovate in order to best support our clients. To this end, SCOR Global Life has a long research and development history – we have seven R&D centres spread across six cities. 
   Each R&D centre is dedicated to a specific biometric risk such as mortality, critical illness, disability, long-term care, medical expenses and longevity, or to a key driver such as policyholder behavior, medical underwriting and claims management. Each centre advocates and educates the insurance industry about a critical subject that impacts the sustainability of healthcare system in Asia and around the world. Through knowledge, we can help build the best possible products for consumers and provides protection in times of need. 
   SCOR Global Life believes “Health is the New Wealth”, and that insurance can play a role in not just providing protection, but in preventative care and promoting healthier living. Not only does this promote consumer wellbeing, but it also offers an approach to reduce potential healthcare costs in Asia. SCOR Global Life has been investing and developing product and service solutions that align with consumers’ healthy living inspirations when ageing population and associated subjects challenge governments, businesses and consumers in Asia.”
Mr Craig Ford
CEO, SCOR Global Life Asia Pacific
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