AIR+08 May 2019

Lowering costs and improving customer satisfaction in health insurance

| 08 May 2019

The costs of healthcare and health insurance are constantly going up and consumer satisfaction with insurance is near an all-time low.

As if escalating underlying costs and dissatisfied customers were not enough for incumbent insurers, these problems are being exacerbated by new entrants such as Amazon, Zhong an and FWD whose entry into the market is exerting increased competitive pressure.

“The pressure wasn’t there in the past and incumbent insurers could do what they wanted to,” said DocDoc co-founder and president Grace Park. “DocDoc went to insurance companies two years ago and it wasn’t on their mental map to focus on policyholder engagement and overall satisfaction.”

“But today, the landscape has changed. An increase in competitive intensity is forcing the incumbent insurers to take action.  If they don’t, they risk becoming irrelevant.”

According to Ms Park, the net promoter score, an industry-standard measure of customer satisfaction and loyalty, of the health insurance industry on average is 12 out of 100. To put things into perspective, Google clocks in at 50 and Apple stands tall at 89.

Ms Park believes the insurance industry needs to help its policyholders solve their problems if they are to increase policyholder satisfaction. In health and life insurance, the inability to help policyholders navigate the medical landscape is at the heart of the problem in which policyholders need help. She said that insurers need to do more to manage escalating medical costs and to keep their policyholders happy through data centric, value added services.

Finding the right doctor

Aside from the common misconception that a higher price translates to better medical care, finding the right doctor is more than just finding one with the right specialisation and qualifications. Experience counts for a lot as well.

“Let's say you need to have hip surgery. Would you go to the doctor who actually does 80% of the practice on shoulders? Or would you go to the doctor who does hip surgeries 80% of the time? That’s an easy decision for most. But the problem in practice is that accessing this information is near impossible for most patients,” said Ms Park.

“It’s very difficult to obtain information at a single doctor level, let alone an entire market or on a regional or global level.”

This is where DocDoc comes in. Having access to a large network of doctors all across Asia, the HealthTech company is able to provide customers with the relevant data points for customers to make an informed decision on which doctor to approach.

With the ability to be fully integrated into a policy, DocDoc uses an AI-powered doctor discovery engine called HOPE (heuristic for outcome, price and experience) to match patients to the right doctors based on verified information, when they experience a medical situation.

Being able to find the right doctor quickly for a customer in need would reduce the chances of misdiagnosis which would consequently lower the costs of health insurance claims as patients will receive the most suitable treatment for whatever malady that ails them.

Lack of transparency

DocDoc currently operates within Asia but the lack of transparency in healthcare and the inability to find the right doctor is pervasive throughout the world.

“This problem is not just a developed-market problem or a developing-market or an Asia problem,” said Ms Park. “It actually is a global issue where consumers and policyholders can be a lot more empowered through information and make the right decision on which doctors they're going to choose.”

In healthcare, consumers usually find themselves completely lost when they have to navigate the healthcare system. At their most vulnerable moment (when they need to find a doctor for themselves or their loved ones), they must choose a doctor in an information vacuum or rely on anecdotal evidence and are then left to face the luck of the draw.

Today, the most common methods of finding a doctor are: 1) Trawling through a directory of doctors and hospitals provided by an insurer, 2) asking existing doctors (e.g. family doctors) for recommendations and 3) asking friends and family for recommendations.

For contrast, Ms Park compared finding the right doctor to buying the right car.

“They don't give you a small sample set of one or two to choose from. You also don’t need to know the thermodynamic concepts like viscosity or how turbochargers and aftercoolers work to judge the performance of a car. You can actually have a whole database of information as well as intermediate data points like mileage (acts an indicator for efficiency), horsepower (indicator of performance) and resale (indicator of value) which a consumer can easily understand,” she said.

“You can then make a decision ... what kind of cars you could possibly buy that would fit and match your needs. Nothing like that exists in healthcare.”

The lack of information not only causes enormous stress on patients but also leads to higher complication rates, re-admission rates, and higher costs. For the insurance company, this translates to higher cost (in terms of claims) and extremely dissatisfied policyholders.

DocDoc aims to close the information gap between patients and doctors to help patients make optimal healthcare decisions for themselves.

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