Insurers and the future

Bupa’s results demonstrate the problems with building an integrated healthcare offering that combines insurance and service provision. What are others doing and what is the future?

Integrated payor/provider models work well at Bupa in Chile, Spain and Poland. But the group struggles to manage big health care service businesses in the UK where last year saw write downs on nursing homes, and this year over £200m dentistry and in Australian care homes which Bupa admits to mismanaging (occupancy has dropped a hair-raising nine percentage points in a year). Click here to see our analysis of Bupa’s results.

But Bupa still sees good links, particularly with dentistry where Bupa-owned practices get the brand out there and act as sales outlets for its insurance products. Axa is also buying up primary care networks in Egypt and elsewhere. UnitedHealth is still struggling to get profits from its vast wholly owned Latin American hospital network, Amil, which has sales of well over US$2bn.

We think primary care and the front-end diagnosis, including telehealth, sits well with payors. At least in theory. Big integrated health care service providers like Mehilianen, Terveystalo and Medicover are getting great adoption rates for their telehealth apps. But that may be precisely because they are NOT insurers and are perceived as care providers, rather than payors. The perception of the insurer comes with distrust of data usage and underwriting but also remember that many patients will never see the insurer as their first point of contact with a healthcare system unless they are abroad.

We think classic private medical insurers are still struggling to build and deploy powerful telehealth solutions successfully. That’s not to say they can’t run successful telemonitoring and wellness programmes designed to bring down costs in the long run. Vitality is the obvious example here. And even going beyond basic PMI, insurers are adopting rehab, psychiatry and coaching solutions designed to get people back to work. Generali is working with Teladoc on its group income protection scheme.

And we think that insurers rarely have the skill set to make complex, people-heavy businesses function well. Part of the problem is cultural. Every country is different. We would not want to be trying to squeeze costs in a Brazilian hospital network where doctors are used to being the bosses. Or envy the task of recruiting more dentists in post-Brexit Britain.

On a global basis, we hear Cigna is doing particularly well in making a fist of international PMI. It has rebranded itself as “a global health service company (that) offers health, pharmacy (and) dental (for) individuals, families, and businesses.” The irony is that as far as we know Cigna is actually keeping well away from healthcare provision and concentrating on selling insurance!

We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.