Chronic diseases have long been an insurer’s Achilles heel
The prevalence of chronic diseases like diabetes and cardiovascular conditions is on the rise worldwide. As per the World Health Organization (WHO), the number of diabetics that stood at 84 million in 1995, will witness a 2.5 times increase to 228 million in the developing countries by 2025. Contrary to the popular belief that chronic conditions are “diseases of the rich or affluent”, it is expected that emerging markets will be hardest hit with the increase in disease burden owing to a significant increase in the aging and overall population in such countries. Chronic diseases have led to significant demand on healthcare systems and have become a major driving factor behind soaring healthcare costs. Consequently, they are a growing concern for governments, employers, and health insurers worldwide. Cancers and cardiovascular diseases are and will continue to remain the two most expensive conditions with the highest number of claims incidence for insurers globally as per the 2020 Global Medical Trends Survey Report by the risk management, insurance brokerage and advisory company Willis Towers Watson.
Technology is driving a “wellness movement” amongst insurers and customers in the hope to combat chronic diseases
In the last decade, technological innovations have led to a “wellness movement” amongst consumers and insurers in the hope to control the costs from chronic disease. Insurers offer such programs to enhance traditional coverage for individuals or as a part of a corporate benefits package for a group life/health insurance or disability benefits. Many standalone companies that specialize in wellness program offerings for insurers and employers have also come into play. While the wellness offerings of each insurer may vary, it typically is a mix of three major types of interventions:
- Clinical measures of health with biomarker screening like health-check-up programs.
- Early screening of potential health risks i.e Health Risk Assessment (HRA) using questionnaire-based assessment tools and biometric data from wearable devices.
- Wellness activities, which promote a healthy lifestyle by incentivizing and encouraging healthier lifestyle behaviors by increasing physical activity, making healthy food choices, managing stress, and reducing substance abuse amongst participants. With advancements in technology, most of these programs are delivered via digital tools like fitness apps, health tracking tools and activity monitors, etc and insurers are finding innovative ways to refine the benefits with their experience. Here are some examples:
- Anthem, the second-largest medical insurance provider in the US, with over 40 million members offers behavioral health support by providing dedicated 24/7 call center access to employees and for guidance in making health-related decisions. It also provides health condition management, online wellness tools, and preventive care programs for diseases like diabetes and heart disease.
- AIA Australia, a life and health insurance specialist that offers a range of products to 2.5 million+ Australians also offers “AIA Vitality Apple Watch Benefit”, allowing its customers to earn an Apple Watch for reaching weekly physical activity targets.
Pret a porter approach doesn’t work in chronic disease management, “snack attack” or “treadmill desks” are not always the antidote
Despite their rising popularity and the expectation from technology-driven wellness programs to decrease the cost of healthcare and help in improving employee productivity, it is not easy to measure their effectiveness and quantify their impact on the insurer’s return on investment (ROI). This could be one of the reasons that the 2020 Global Medical Trends Survey Report by Willis Towers Watson highlights that organizations in Asia-Pacific may be unwilling to allocate additional budget to wellness programs, thereby slowing down the progress in preventive education around them. Only 36% of the insurance respondents in the report considered “disease management” as effective tools for managing medical costs. Similarly, results of a randomized clinical trial that involved 32, 974 employees at a large US warehouse retail company published in a reputed journal JAMA reported a slight increase in employee engagement but concluded that there was no statistically significant difference in the “clinical markers of health; health care spending or utilization; or job performance after 18 months” of a workplace wellness program. The program in this case consisted of a series of 8 modules that included health educational webinars on nutrition, stress management, exercise challenges, and weight loss activities.
Some of the greatest shortcomings of large-scale wellness programs are that due to their “one size fits all” approach, employees with special medical needs and pre-existing chronic conditions such as diabetes and high blood pressure may not be able to participate or may feel embarrassed to participate. Such programs may also not take the social determinants of health of each individual into account, thereby leaving out the most vulnerable and high-cost sub-population.
Health and wellness have gone digital, but all that is digital is not therapeutic
“Digital health” is a broad term to describe all kinds of health technologies that are focused on patient engagement for health purposes and are deployed in prevention, diagnosis, treatment, and management of health and disease. The broad scope of digital health includes categories such as wearable devices, mobile health (mHealth), telehealth and telemedicine, health information technology (IT), and personalized medicine for improving a person’s health and wellness. Digital health is a growing sector and it holds a huge promise for addressing many challenges of healthcare. A report by IQVIA institute estimates within m-health over 318,000 health apps available on top app stores worldwide and almost 200 health apps get added each day. A wide variety of products within the wellness segment falls in this category and may range from fitness bands to health apps that help in tracking and monitoring a person’s health parameters. Many insurers have developed their own suite of apps to help their customers with their health and wellbeing.
Contrary to a wellness app that may routinely perform the function of data logging and dissemination of educational content, digital therapeutics (DTx) is a distinctive category of evidence-based products. The main function of a DTx is delivering software-based “therapeutic interventions” to the patients for the prevention, management, or treatment of a medical condition. These areas are often intermingled even though their nature and the solutions they provide are different on many scores.
The Digital Therapeutics Alliance, a consortium of industry stakeholders, has laid down the official definition of DTx as: “Digital therapeutics (DTx) deliver therapeutic interventions directly to patients using evidence-based, clinically evaluated software to treat, manage, and prevent a broad spectrum of behavioral, mental, and physical diseases and disorders. They are used independently or in concert with medications, devices, or other therapies to optimize patient care and health outcomes.”
Unlike the wellness apps which are not specific to disease management, digital therapeutics are tailored to specific diseases like diabetes, heart disease, hypertension and can complement or even replace prescription drugs for managing these health conditions in certain cases by real-time, personalized coaching and behavior modification. One of the main distinctions between DTx and off the shelf wellness apps is that DTx has been validated after undergoing clinical trials so physicians can “prescribe” them just as they would prescribe medicine.
Insurers have traditionally looked at evidence of how well a “drug” works before paying for it; time now to look at evidence of the effectiveness of their wellness programs too
Insurers stand to gain multiple benefits from a DTx based wellness/disease management program
- Wellness programs can be implemented by insurers using DTx not only at a fraction of the cost of the traditional programs, but are also massively scalable and highly effective.
- DTx brings about positive health outcomes in individuals with pre-existing chronic conditions by addressing problems in real-time such as what action to take for a high blood glucose reading or decision making in choice of food for a healthy blood sugar balance. In this new age, an insurer’s profitability is aligned with long-term positive health outcomes which cannot be achieved in a single instance of hospitalization which insurers typically reimburse. Instead, positive health outcomes are demonstrated by consistent management of clinical markers within acceptable limits. In chronic diseases like diabetes, this refers to blood sugar, BMI (Body Mass Index), HbA1C, etc through continuous monitoring and real-time interventions and behavior modification. For example, studies have shown that after enrolment in a DTx disease management program, the average participant experienced sustained weight loss of 3.5 to 5 percent of their body weight beyond one year. Improved health resulted in $4241 to $9722 in net medical cost savings over two years compared to non-participants, equating to a return on investment ranging from 1.5 to 2:1 for employers.
- DTx solutions don’t just compile data but also actively engage with the patient, gather clinical evidence, and directly influence the patient’s treatment. Insights emerging out of this data can be subsequently used in product development and underwriting functions by insurers.
Dr. Abhijeet Kanetkar
VP – Insurance Business,
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