Role of Digital Therapeutics(DTx) in Reforming the Insurance Industry

Digital Therapeutics and Insurance

While the importance of Digital Therapeutics (DTx) is gradually gaining ground among the stakeholders in the health infrastructure, insurance industry, too could benefit from the clinically validated digital tools. According to a report published by DRG Perspectives, in a developed economy like the U.S., 70% of formulary decision-makers cover or are interested in covering digital therapeutics(1). In India too, the recently announced National Digital Health Mission (NDHM) will extend support to the burgeoning industry of DTx in the domestic healthcare structure and usher a brand new era in the health insurance segment.

Insurance industry, like every other industry, has gone through disruption in 2020 due to the pandemic. Earlier in the month of August at a FICCI conference, Insurance Regulatory and Development Authority of India (IRDAI) shared that since the outbreak of pandemic till late August 2020, over 130 new insurance products were introduced in the market (2).  With no surprise, health insurance dominated the insurance field compared to other streams of insurance. The constant worry about health, rampant job losses, cash-crunch gave a push to health insurance demand. However, for the insurance industry too, where patients with co-morbidities were already considered to be a ‘bleeding portfolio’, COVID added another dimension of concern for the payers. Patients with existing health complications require frequent visits to the hospitals/clinics, which eventually increases the cost of treatment and hence impacts the pay-outs. This has been a prime reason why even in the pre-COVID era, insurance companies have been apprehensive about patients above a certain age and with pre-existing conditions. The premiums chargeable to standard patients are lower than that charged to patients with chronic conditions. In other words, most health insurance companies would have a sub-clause of benefits for patients with co-morbidities would be effective from the fourth year of the insurance. The clause gives the companies buffer time to observe how the patients managed their chronic condition for three years. Post the three years, due diligence of the reports, medications and treatment would be done and then the chronic condition would be covered too.

Chronic conditions require sustained efforts of monitoring and adherence to the medication and treatment prescribed. However, non-adherence is a major challenge in deliverance of positive clinical outcomes. Lack of motivation, denial of complications, belief in other treatments, and complacency with immediate effect of the treatment, are some of the reasons for non-adherence of medication and treatment. Adding to that, time constraints, poor payment modules for the doctors and lack of rapport with the patient slows down the monitoring. The dependency on the physician/s can delay the check-up visits.  Therefore, empowerment of the patient is crucial and that is where  DTx plays an important role. DTx empowers, and enables the patients to monitor their chronic condition digitally. From recording their blood pressure, Sugar levels, to reminders to take medicines or schedule a visit/call with the doctor and more importantly a personal connection with a professional health coach to help out, facilitate the patients with the much needed constant support. This, in turn, helps the physicians with handy data about the patient, chart a way forward for the treatment, and mitigate any sudden escalation of the condition. The cascading effect of DTx application lowers the chances of getting readmitted to the hospital or decreases the average days of hospitalisation. In addition, DTx also helps avert severe health complications. Even in the sudden and unprecedented times of COVID, patients with chronic conditions were considered to be more susceptible and over 70% of COVID deaths were of patients with Diabetes, Asthma, Heart Ailments, or Hypertension. In such instances, better managed and tracked health, readily available and up to date reports of the patient would reduce the chances of delay in ascertaining the treatment or medication.

Insurance sector primarily functions on data and at this moment, the sector is functioning on data which is either incorrect, malafide and not updated. The advent of DTx can help establish a platform which rectifies all the errors and enables all the stakeholders, including insurance companies to function seamlessly.

Author:

Dr. Abhijeet Kanetkar

VP – Insurance Business, Wellthy Therapeutics

References:

  1. https://decisionresourcesgroup.com/downloads/u-s-payers-warming-covering-digital-therapeutics/
  2. https://brandequity.economictimes.indiatimes.com/news/marketing/no-time-for-scare-to-sell-insurance-brands-new-narrative/77876855