Group health insurance industry at a crossroad

Technology, consumer expectations and cost pressures are moving the group health insurance industry to the brink of disruption—and a big question is whether such transformation will come primarily from within the current system or from new players, noted Luc Vilandré, Vice-President and COO of TELUS Health, during his presentation at the TELUS Benefit Management annual conferences in Toronto, Montreal, Québec and Vancouver.

“When a lot of pressure is applied on a given business model, this often leads to disruption and transformation [from new players]. We see many illustrations of this outside our industry, with new entrants such as Uber, Airbnb and Amazon,” he explained. While the signs and symptoms of disruption are growing within health insurance, and as much as we would like to believe otherwise, there is not much evidence of change outside of traditional ways of doing things. “We have to stop thinking that doing more of the same, year after year, will fix any given situation. We must be more creative, and much more proactive,” he urged the benefits providers in the room.

What are the growing signs and symptoms of disruption?

Increased concerns over sustainability certainly come to mind, in a new era of pharmaceutical innovation that will see more effective treatments at higher costs. “The traditional push-pull balance, where we could equalize [costs with savings elsewhere], is more and more difficult. The deficit seems to be constantly increasing,” said Vilandré.

Yet a fixation on cost containment may distract from other equally important drivers of change. For example, “consumer empowerment needs to be at the heart of our industry strategy, wherever we sit in the supply chain,” stressed Vilandré. “End users need to be able to access tools and services easily. This is the ask. When we think of ourselves as consumers, we are already doing this every day in other industries—think of online banking, for example. It is time for us to lead that [type of] change in our industry.”

New forces shaping healthcare

• Demographics: Aging society Increased ethnic diversity
• Consumer empowerment: Greater responsibility Demand for value
• Care Anywhere: Accessible healthcare through mobile, retail and other channels
• Health Outcomes: Shift from volume to value based funding
• New Entrants: Non-traditional players disrupt status quo

Digital technology is often the key driver of changes

Digital technology is another driver of change, linked inextricably with consumer empowerment. “In all cases of industry transformation, we see that technology has closed a gap and created a direct connection with consumers,” observed Vilandré.

The integration of coverage information with prescribing tools in the physician Electronic Medical Record (EMR) is one of many untapped opportunities, for example. “We can drive a complete integration of processes in the physician’s office and optimize each prescription at the point of service. The technology is there, and implementation is really more about change management and education of users.” As an industry, we need to take the lead rather than wait and see what will happen with other players.

As other industries have shown, however, such a wait-and-see attitude among traditional players opens the door wider for nontraditional players to take the lead and force change in a way that the traditional benefits industry may not be able to control. “Technology has forced change on a lot of industries, and we are seeing the same situation starting here. Together, we still have the chance to reinvent ourselves and lead that change,” encouraged Vilandré while addressing group insurance companies and benefit consultants in the room. He added. “At TELUS Health, more than ever, we are ready to be part of the solution.”