The new medical insurance
Healthcare without insurance but with reassurance
I see a world where the new medical insurance is a primary care subscription. Bear with me here. Let me explain…
What is the point of medical insurance? Designed to fund unexpected, significant, often expensive healthcare interventions. The kind of interventions that could bankrupt many people in the world, if you really needed to access it. And so we pay a much smaller amount of money regularly to insurance companies, which goes into a pool with everyone else’s relatively smaller amounts of money so that if those significant and often expensive healthcare interventions happen to you or me, we don’t have to pay for all of it. The pool will pay. That’s it. That is basically the point of medical insurance from my perspective.Â
I see a future where we won’t need medical insurance in this sense. Rather I see us all paying regularly (either out of pocket, via our employers, or via the government) for a primary care service that proactively keeps us in good health. They’re in the business of making sure the unexpected, significant, often expensive healthcare interventions don’t happen to us. If this service does its job well, it should use a fraction of the cost for the service, to care for you, a fraction to care for you if those unexpected, significant, often expensive healthcare interventions happen to you, and a small fraction for-profit and reinvesting in the service. Now is this feasible? I think 1000%
The way to do this is to build a primary care service that is 90% virtual, powered by intelligent algorithms and highly trained compact clinical teams that understand trends in your healthcare and empowered to intervene whilst care is early, effective but dramatically cheaper. This doesn’t mean the entire onus of good health is on the primary care service itself. The individuals themselves will need to be empowered take individual actions to stay in good health. And if not then the price for the service will increase or remain high because their risk of an unexpected, significant, often expensive healthcare intervention will be significantly higher.Â
This is already starting to happen at the insurance level. Last week, Clover health, a medicare advantage insurance company merged with $IPOC in a deal that values Clover health at $3.7 billion. Clover’s main differentiator is that it utilises machine learning to customise how the Physician can help deliver better care for members. Members cared by physicians who use Clover’s assistant see 22% fewer hospital visits and 23% fewer ER visits. I see a world where these numbers are at least 90% and 95% respectively with a more intelligential powered virtual primary care service leading care.Â
I also think this will become the new medical insurance because the insurance industry is heavily regulated. Innovation is caped. The extent to which an insurance company can be effective at caring for you is limited. Again let me explain. In the insurance world, there is a key metric called the Medical loss ratio which insurance companies are legally bound to adhere (1). The Medical loss ratio is a measurement of how much of the revenue associated with premiums are used for medical costs ie. MLR = Medical Costs/Premium. A health insurance company that pays $8 in claims for every $10 in premiums collects has a MLR of 80%. Insurance companies want to keep this as low as possible. By law in the states, this is 80% minimum. What if you could deliver a better comes with much lower costs, below 80% in medical costs. As an insurance company, you legally couldn’t but as a primary care subscription, you legally could. This 80% constrain makes sense to prevent foul behave by insurance companies to deny claims to maximise profits but it also prevents innovation that could dramatically reduce the cost of care whilst maintaining or improving quality.Â
Long-term conditions are the largest costs and burden of care in the system. In the UK, treatment and care for people with long-term conditions is estimated to take up around £7 in every £10 of total health and social care expenditure. Crazy! Effectively maintaining people with long-term conditions in good health then we will transfer the cost of care in such a way that I don’t see the point of medical insurance. Such a primary care service will care for billions not millions of people because it will use technology to scale access and quality. It will own hospitals that are essentially healthcare centres on every continent in the world. Each designed to scale based on demand for care. It will be highly accessible, personalised and affordable. This is the future I foresee and the future I tend to contribute to. I don’t know how. But I am certain it will look similar to this.
1. I can figure out whether this is just a US thing. Please help