Tackling surging costs and improving the efficiency of market operations is critical for the Latin America international private medical insurance (IPMI) market, the World of America Convention has heard.
Insurer leaders agreed that artificial intelligence (AI) and other new technologies would play a significant role in this but also promoted the option of insurers becoming more aligned and tighter on overcharging and overbilling by healthcare providers.
Bupa commercial director for Guatemala Guillermo Rojas noted that AI was already having a sizeable impact on processes for insurers and helping to reduce administration costs and improve efficiency.
“The processes are much more agile and I believe that thanks to AI we can say 70% of standard cases can be approved much faster, much more efficiently, leaving that other 30% for the doctor or the evaluation team to look at those slightly more complex cases,” he said.
“I do feel that the moment you can control the risk a little more when issuing a policy, you can also play with the price a bit, lower it somewhat – that we can have more competitive prices because the underwriting is becoming more accurate.”
Rojas highlighted that underwriting was where technology was making the fastest impact. “The underwriting models aren’t so complicated anymore, so it allows many of the standard risks, or risks that are slightly substandard with a great variety or complexity, to be automated much more efficiently,” he continued.
“Therefore, all the energy of the experienced underwriting team can be dedicated more to the complex cases, which provides more speed, more agility, and makes it easier to generate the processes.”
This depth of immediate impact was echoed by Best Doctors chief executive officer Sheldon Kenton who agreed AI implementation would benefit insurers and customers, “making for a more competitive offering”.
“That’s already there – the next stage of this will be how we turn that into a positive underwriting and claims experience,” he said.
“This applies across the globe, we have typically relied on a few pretty basic formulas for working out Just how old you are, whether you’re married, and whether you might claim.
“We all know there’s a whole load of stuff beyond that which gets you to a better view of propensity to claim, propensity to get sick and if we can convert that into guidance for customers, that’s a huge value-add to the customer.”
Controlling overbilling
However, one of the subjects that drew the most vocal agreement was that of controlling costs, particularly those from treatments and medication from healthcare providers.
Several agreed that there was a need for insurers to be more proactive and to potentially work together to ensure fees met usual, customary and reasonable (UCR) charges.
Redbridge vice president for business development Richard Irures raised this as being a particularly critical factor to consider.
“All of us here face a challenge, which is cost control; to attack this new growing niche, we have to control costs – strictly control costs,” he said.
“Everyone can have their strategy, everyone can have their artificial intelligence, and everyone can do whatever they want, but there is something where I’d like to be a bit disruptive.
“I want to call upon all the colleagues present here, I believe this is imperative, it is that we, the insurers, meet and start reaching agreements on how we are going to apply UCR in these countries so that a doctor doesn’t abuse the system by overbilling a client.
“Why? Because if they go elsewhere, they’ll get paid the same as anyone else pays. To the extent that we as companies are more aligned and have parameters so that doctors and hospitals don’t overbill international insurers, we will have a better chance of attacking that new market niche that is going to emerge in Latin America and the Caribbean.
“That is the vision we have,” he added.
‘Long-term market challenge’
Trawick International president for LATAM David Capote echoed Irures’s thoughts and highlighted that treatment costs had a significant effect on client premiums.
“One of the main challenges for this market is the issue of sustainable long-term premiums for the client,” he said.
“We have already seen that often in five years or six years a client is paying double what they were paying when they purchased the plan.
“Clients are much more educated, they know much more about what they expect from their own health and how to manage their health.
“So I think change will come a bit from breaking that model where products haven’t changed much since back in the day.
“How do we break that structure and that product design? To give the client more price flexibility in the long run, and make it something sustainable so they can be taken care of not just for the first two or three years, but for the entire life of their policies.”
Negotiate with providers
Bupa’s Rojas also strongly supported the need for better control on treatment costs and wanted to work with healthcare providers to achieve this.
“The issue is that catastrophic conditions are recurring more frequently now. For all oncological, cardiological, and neurological diseases – the number of cases is rising year over year, and that hits our claims ratio directly,” he said
“I completely agree; as insurers, we have to unite to see how we can discuss and manage to contain these costs, but I believe providers also play an important role in this area.
“We have to sit down with them; we have to negotiate. We have a significant challenge as a company to figure out how to lower costs and how to achieve better negotiations with our providers.”
Reduce impact of expensive drugs
Looking into where AI and other technologies could improve the situation in the future, Vumi Group president and CEO David Rendall highlighted several potential methods.
This includes being able to better assess claims coming from locations around the world and potentially update guidelines faster as a result.
“We’re going to be scoring and creating a healthier pool, which I think will help bend that cost curve,” he said.
“When you look at the inefficiencies in IPMI – just 8% of claims are fraudulent and that’s kind of a historical figure that doesn’t even necessarily account for bad risk coming in.
“If we can control the risk coming in then we can have lower rate increases, but also if we can keep people healthier – if someone has a wearable and we’re receiving that data, now we can intervene before it becomes an issue.”
He also highlighted the vast expense of new drugs being designed and released and that greater data and customer lifestyle connectivity could help reduce the need for these.
“As more money gets poured into developing expensive drugs, we have the knowledge, so how do we fight that?” he continued.
“Information is key, along with helping our clients understand if you eat your food in this order you won’t have a sugar spike, and you probably won’t develop diabetes that turns into all these other comorbidities as well.
“So it’s going to be a partnership, and I think that’s how we flatten the cost curve.”