What challenges will health insurance face? By Rafael Senen CEO at COVERONTRIP DIGITAL INSURANCE

WHAT NEXT CHALLENGES WILL HEALTH INSURANCE FACE?

WILL ONLY INNOVATION BE ENOUGH?

Rafael Senén CEO & Co-Founder

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DEMOGRAPHICS

FINANCIAL

HEALTHINDUSTRY

REGULATORY&ETHICS

MEDICALADVANCES

TECHNOLOGY&DATA

HEAL

THCONDITION

ISSUESIMPACTINGTHEGLOBALHEALTHCARESECTOR

private and confidential | coverontrip digital insurance s.a. | 2017

DEMOGRAPHICS-AGING

72.3years

73.3years

Population aging is accelerating rapidly worldwide.

Life Expectancy

20142019

People aged 65+ worldwide to over 604 million 10.8 %

20.8 %

“Contrary to common assumptions, aging has far less influence on

health care expenditures than other factors, including the high costs

of new medical technologies.”

Worldreportonagingandhealth, World Health Organization, 2015


DEMOGRAPHICS-CHRONICANDCOMMUNICABLEDISEASES

Increased Life Expectancy

Proliferation of chronic diseases

Obesity CV Diseases Hypertension Dementia…

Challenging Health Systems

Drugs and treatments

The current number of people with diabetes globally is 387 million and that number is expected to increase to 592 million by 2035, according to the International Diabetes Federation.


Diabetes is a global threat with prevalence rates, which vary from region to region from 5.1% the lowest, to 11.9% the highest.

Source: Juvenile Diabetes Research Foundation International (JDRF)

DEMOGRAPHICS-CHRONICANDCOMMUNICABLEDISEASES

DEMOGRAPHICS–CONSUMERENGAGEMENT

q  Consumers are more informed, involved in, and financially responsible for their healthcare decisions

q  Consumers now are more actively involved in their personal health rather relying only on doctors’ expertise

q  Consumers increasingly value online and mobile information exchange with their provider and health plan

Consumer behaviors drive health management

Patient Empowerment

Consumer Engagement


q  Preventive healthcare is becoming widely known as consumers are increasingly concerned about health related issues and healthcare costs

q More people are adopting digital health apps to manage their care when and where they want it


feel comfortable consulting with a provider via email or phone

of consumers would like access to technology that enables review of quality

and satisfaction rankings

of consumers have no concerns about using mobile technology to

pay their medical bills

Deloitte’s 2015 Survey of U.S. Health Care Consumers.

61 %

36 %

52 %

(*) Health purposes include learning more about and/or sharing personal experience with a specific illness, injury, or health problem; specific prescription medications or medical devices; specific doctors or hospitals; the health care system in general; health technologies that can help you diagnose, treat, monitor, or improve your health; or other health -or care- related purposes. Source: Deloitte 2015 Survey of US Health Care Customers.

Use of social media for health purposes(*)

28%

37%

22% 21%

22%

18%

6% 8%

2013 2015

Millenials (18-33 years)

Seniors (70+ years)

Gen X (34-50 years)

Boomers (51-69 years)



Proper environmental conditions are critical for healthy living and can help to prevent diseases.

by 2050, 66 per cent of the world’s population is projected to be urban. Cities usually grant better access to

healthcare services but are sources of pollution (air, water, soil, sound, ...)

URBANIZATION 54%

World population lives in cities

DEMOGRAPHICS–ENVIRONMENT

WATER 748 million people

remain without access to an improved source of water

The number of people whose right to water is not satisfied is even greater, probably in the order of 3.5 billion.


Climate change affects the social and environmental determinants of health –

clean air, safe drinking water, sufficient food and secure shelter

CLIMATE 250.000 additional

deaths and millions of chronical diseases per year



Breathing PM is associated with increased risk of heart attack, stroke and other

cardiovascular disease; respiratory illnesses such as emphysema; and cancer.

Air pollution only in California kills 25,000 people per year and costs $200 million

worth of medical expenses.

AIR 1 year

is the life expectancy decreased in the European Region by exposure

to particulate matter (PM).


Smog glows in the sunset in Shanghai, China. (Matt Mawson/Corbis)


DEMOGRAPHICS

FINANCIAL

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FINANCIAL-GOVERNMENTSPENDING

HEALTH CARE IS ONE OF THE LARGEST INDUSTRIES IN THE WORLD

9.9% GDP

10.0% GDP 17.1% GDP

9.1% GDP

Source: The World Bank 2014

Governments

Universal HCS

Optimizing their supply chain Revenue cycle, using bulk purchasing Reducing labor expenditures Improving clinical efficiency


FINANCIAL-ALTERNATIVEMODELS

Value-based care has emerged as an alternative and potential replacement for fee-for-service reimbursement based on quality rather than quantity.

There are different VBC models that are currently been implanted by different governments, but also big payers.

Shared Risk

Shared Savings Bundles

FFS

• Full-risk arrangement with provider receiving PMPM payments regardless of services used and bearing the full impact of any upside or downside

• Could be condition- or population-focused models with risk across multiple populations

• Requires mature capabilities

• Paid under FFS until year-end reconciliation. Upside bonus paid if cost and quality goals met within a pre-determined corridor; downside risk for portion of spending that exceeds cost containment targets

• Typically multi-year risk- sharing contract with integrated systems or large physician groups

• Arrangement with predetermined reimbursements for clinically defined episodes/bundles of care instead of separate payments to hospitals, physicians, etc.

• Includes upside potential and downside risk

• FFS until year-end reconciliation plus gain-sharing or bonus contract with physician groups for attributed members based on overall quality and medical cost versus target. Savings come from better coordination and population health management (e.g., using PCMH)

• Volume-based, low-risk model where a set fee is paid for each service or procedure provided

Increasing level of risk and capabilities required

Capitation RANGE OF PAYMENT MODELS


In more basic terms, value-based care models center on patient outcomes and how well healthcare providers can improve quality of care based on specific measures, such as:

•  reducing hospital readmissions, •  using certified health IT •  and improving preventative care.

FINANCIAL-VBC

Last year, US HHS announced that 20 percent of Medicare payments in 2015 were made through a value-

based, alternative payment (30%/2016 – 50%/2018)

20% Medicare payments

VBC payments

VBC payment models helped reduce hospital readmissions in Medicare beneficiaries by eight

percent in 2015 (12%/2016 – 20%/2018)

8% Medicare hospital

readmissions down

Other Big Payers private and confidential | coverontrip digital insurance s.a. | 2017

Amid the reform-driven shift to outcomes-focused and value-based payment many countries are instituting reform-driven drug price

controls.

FINANCIAL-DRUGPRICECONTROLS

U.S. health plans try to control pharma costs through reference pricing, formularies, and co-payments Germany moved to a highly regulated pricing regime from a free pricing market in 2011 China, the government mandates that all public hospitals procure pharmaceuticals through a provincial, centralized bidding system U.K. uses quality-adjusted life years to evaluate the cost-effectiveness of treatments.44


Generic drugs will continue to gain market share as both public payers and health plans seek to reduce costs.

FINANCIAL-DRUGPRICECONTROL

84 % Is the generics’ share in the

United Kingdom of the pharma market in 2012

11 % Is the yearly growth rate

of generics sales in Brazil

80%

by April 2021 is the target of Japan’s government for

generic use from 60 percent by the end of April 2018.

70% of the pharma market

by volume comes from generic drugs in USA

Development and sales of biosimilars, biologic products which are similar but not identical to reference biologic products — and less expensive — are accelerating, as well.

In EU more than 700 biosimilars approved or nearly.


DEMOGRAPHICS

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The healthcare ecosystem is a complex one with differentiated groups of key players having relationship each other.

HEALTHINDUSTRY


HEALTHINDUSTRY

•  Contradictory reward system stressing efficiency pressures but still paying doctors based on number of visits.

•  Physician’s role changing from an undisputable expert into a therapy prescriber/guide

PHYSICIANS AND CAREGIVERS

Percentage of physicians who say they feel responsible to control healthcare costs

38%

82% 81%

9 years ago

4 years ago Today Source: Bain Front Line of Healthcare, January 2015; Bain Physician Attitudes Survey, January 2011


• The rise of big data predictive models and consumers’ growing comfort with tracking their daily habits have accelerated the adoption of wearable technology, health apps and other high-tech digital applications.

• Many technology and data based companies such as Google and Apple are developing long interests in health and life science

HEALTHINDUSTRY

TECHNOLOGY AND DATA PROVIDERS

(1) The State of the Art of mH

ealth App Publishing. (2) D

ISYS.


HEALTHINDUSTRYTECHNOLOGY AND DATA PROVIDERS

ProjectBaseline

Anini.a.vetodevelopacompletemodelofthechemistryofahealthy

humanbody

Currentlydevelopingasmartcontactlens,solarpowered,thatcollectsdiagnos.cdatausingsensors

CuringHeartDisease

EnteredintoapartnershipwiththeAmericanHeartAssocia.ontodrop$50millionintofundingasingle

projectbeginningin2016

SmartContactLenses

HealthKit

PlaHormwhichallowsthedevelopmentofhealthandfitnessapps

tobeusedingatheringdatafromindividual

AplaHormforresearcherstobuildmedicalappsandrecruitpa.entsfor

clinicaltrials

ResearchKit

CareKit

Aframeworkfordeveloperstocreateappsthatwillenableyoutomanageyourownwell-beingonadailybasis

UsingthesmartphoneAlexaapp,EchoownersenableKidsMDfromBostonChildren'sHospital

Introducedanappwhereconsumersuploadanimageoftheirprescrip.onandgetquotesfromnearbypharmacies

Asaresultofits“Organ-DonorStatusIni.a.ve”,organdona.onsign-upincreased21-foldoveraverageonthe

dayitrolledout


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REGULATORY&ETHICS

Muchofhealthcare’sregulatoryfocusisonpa.entanddrugsafety.Regulatoryagencies

con.nuetoexertpressureonpharma,biotech,andmedtechcompanies,withincreasingemphasisonoff-labelmarke.ng,failurestodisclosesafetyrisks,andconcernsabouttheclinical

trialprocess.

PATIENTANDPRODUCTSAFETY

CIBERSECURITY

RegardingCloud-basedcompu.nga\acks;medicaldevicessecurityconcernsandcontrolofprivileged

access.

FRAUDANDABUSE

AnimportantpartthefightagainstfraudandabuseistheIndustrybeableof

trackingandanalyzingtherela.onsand

interdependenciesthatexistwithinHCEcosystem.


DEMOGRAPHICS

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MEDICALADVANCES

NANOTECHNOLOGY STEAMCELLTREATMENT

REJUVENATIONRESEARCH

TELOMERASE

MAINTENANCEOFCONSCIOUSNESS

BIONICLIMBS

GENETICMAP DNAMANIPULATION

NEWCHALLENGESregardinganewperspecNveaboutinmortality


DEMOGRAPHICS

FINANCIAL

HEALTHINDUSTRY

REGULATORY&ETHICS

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TECHNOLOGY&DATA

MAINDRIVERS

according to a recent research by Gartner

3DPRINTING

of people in the developed world will be living with 3D-printed items.

10 %

of surgical procedures requiring prosthetic, implant devices or organs will use 3D

Printing as a critical tool

35 %

by 2019


TECHNOLOGY&DATA

MAINDRIVERS

mHEALTHDiagnostic tools will be used both for preventative / decision support and

treatment compliance purposes

HealthcareWearableDeviceShipmentsandRevenue,WorldMarkets2015-2020(1)

(1)Source:Trac.ca


Wearable developments based on new materials and miniaturization allowing implantation into the body’s various parts and systems Wearables are backed with decision support capabilities

TECHNOLOGY&DATA

MAINDRIVERS

BODYINTELIGENTIMPLANTS&PROSTHESIS


Applications may go from early detection – action strategies, to support

AI systems to interact with persons Current data processing capabilities

allow to analyze data which was impossible to process years ago,

running more complex analysis and using data in depth

TECHNOLOGY&DATA

MAINDRIVERS

PREDICTIVEMEDICALDATAMODELS


TECHNOLOGY&DATA

MAINDRIVERS

COGNITIVETECHNOLOGIESANDAIBASEDHEALTHCARE

DecisionMakinginHealthcare:TheGrowingGapBetweenAvailableDataandHumanAbility(1)

(1)IBMW

atsonHealth:CapturingtheValueofBigData:BigChangesAhead


TECHNOLOGY&DATA

MAINDRIVERS

AUGMENTEDREALITYANDVIRTUALREALITY

TELEMEDICINEANDREMOTEROBOTICSURGERY

HEALTHINTELIGENTDOMESTICOBJECTS


DEMOGRAPHICS

FINANCIAL

HEALTHINDUSTRY

REGULATORY&ETHICS

MEDICALADVANCES

TECHNOLOGY&DATA

HEAL

THCONDITION



BUT WHAT ABOUT THE HEALTH INSURANCE INDUSTRY?

BIG CHALLENGES, FAST CHANGES AND NEW TRENDS?

IS IT READY?

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WHERETOFOCUS?SHOULDWESHOOTANYTHINGTHATMOVES?

AGING CHRONICAL DISEASES

AIR – WATER CLIMATE – URBANIZATION

PUBLIC HC SYSTEM MEDICAL ADVANCES

PATIENT AND PRODUCT SAFETY

FINANCIAL MODELS DRUG PRICE CONTROL

GENERIC AND BIOSIMILAR CYBERSECURITY

FRAUD AND ABUSE TECHNOLOGY AND DATA

PREVENTION CARE UNITS

CONSUMER BEHAVIOR PATIENT EMPOWERMENT

WECANDOORWECANUSE


1

2

3

4

FOURGOODSTARTINGS


1


HEALTHLITERACY PATIENTCONTROL PATIENTPARTICIPATION

LinkbetweenpaNentandhis/her

understandingofhealthinformaNon

RelaNonshipbetweenthepaNentandthemanagementofhis/

hercondiNon

RelaNonshipbetweenpaNentandhealth

professionals

MEANINGFULPATIENTINVOLVEMENTINHEALTH


TOP THREE SERVICES AVAILABLE TO PATIENTS ELETRONICALLY

(1) Accenture. Doctors Survey. (2015)


2


Membersengagedinhealthyac.vi.esexperiencedfeweradmissionsandlowercoststhanothers.


3


OSCAR´s PROPOSAL IS BASED IN: 1.  SIMPLICITY IN THE OFFER (ONLY THREE PLANS) 2.  DIGITAL AND SIMPLE CUSTOMER RELATIONSHIP 3.  PREVENTION AND ENGAGEMENT THROUGH WEARABLES


4


ANDTHEELEMENTSAREALREADYTHERE…

DIGITALTRANSFORMATION INTERNETOFTHINGS

BIGDATACAPABILITIES TECHNOLOGYWELLUSED


SANDTHISISWHATINDUSTRYTHINKS…


Concept

InnovaNon

FoundingYear

GeographicScope

•  Thecompanygiveswearablestoitsmembers,whogeta$20rewardformee.ngac.vitygoalseachmonth

•  Oscarclaimsthatpeopleiskepthealthierthroughthesemonthlygoalsandbyusingwearables

•  USA(star.nginNY,NJ,CA,TX,butexpandingna.onally)

•  TechplaHormwhichhelpsemployerstooffer“healthbenefits”totheiremployees

•  Collec.veHealthhelpstocustomizeindividualhealthplansforeachemployee

•  USA

•  2013 •  2013

•  USA

•  2013

•  USA

•  2012

•  Anadvisor/conciergeonhealthinsuranceplans

•  Basedon38factorshelpstocompareandfinetherightplanforeachcustomer

•  Alifeinsuranceproviderwhichchargeseachcustomerbasedontheirspecificphysicalac.vity

•  Throughappsandwearables,thecompanymonitorsusers’ac.vityandassiststhemtoaccomplishtheirgoals

INNOVATIONISHERE…


INNOVATIONISHERE…


Dr. Allianz • Digital house calls-that

leverages mobile technology to monitor vitals in patient’s home

• Patients can contact Dr. 24/7; if needed, Dr. will come to them

Ask a Nurse 24/7

• Users can call a

telephone number to get immediate answers to non-emergency health questions from a registered nurse

LiveHealth Online

• Uses the video capabilities of members' computers to have a face to face virtual meeting with a doctor- on demand.

Digital Underwriter

• Insurance applicants can apply from anywhere and get instant decisions on their smart-device

• The aim is to be paperless for both parties

INNOVATIONISHERE…


INNOVATIONISHERE…


ASWELLASFUNDINGFORSTARTUPS…


BUTITISNOTENOUGHTOOVERCOMETHECHALLENGESTHEINDUSTRYHASTOFACETOWITHINTHENEXT5YEARS

FINANCIAL MODELS DRUG PRICE

CONTROL GENERIC AND BIOSIMILAR

CYBERSECURITY FRAUD AND ABUSE TECHNOLOGY AND

DATA PREVENTION CARE UNITS CONSUMER BEHAVIOR PATIENT

EMPOWERMENT

CUSTOMER/PATIENTCENTRICMODELSSTABLISHINGVBCPAYMENTSNEWPROVIDERSMANAGEMENTRELATIONSHIPCREATINGNEWPLANNSLINKEDTOPHARMACOSTSFUNDINGSERIOUSLYPREVENTIONCAMPAINGS,RETHINKINGCAREUNITSNETWORKSamongothers…

HCINSURANCEINDUSTRYHASTOWORKHARD


THANK YOU

coverontrip.com

Rafael Senén CEO & Co-Founder

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What challenges will health insurance face? By Rafael Senen CEO at COVERONTRIP DIGITAL INSURANCE

Presentations & Public Speaking

Transcript of What challenges will health insurance face? By Rafael Senen CEO at COVERONTRIP DIGITAL INSURANCE