Medicine continues to develop at a rapid pace, and many of these developments, whether they improve the diagnosis or treatment of disease, will have an impact on life insurance. Given the sheer number of new developments in medicine, it is not possible to cover the full spectrum of innovations. In this short article I will highlight just a few of the emerging trends from which the insurance industry is already feeling the ripple effect, at least in terms of the need to respond to them.
This constant state of flux also raises an interesting debate about adoption curves, and when to expect the tipping point for these medical advances, that moment they go from being cutting-edge to the standard of clinical care. The clinical utility of a particular test is also reliant on its cost-benefit ratio, performance against the gold standard, and health provider attitudes, i.e., how willing they are to adopt it in their practice. It remains true that, despite the best attempts to project forward, some treatments or technologies will never successfully reach meaningful utilization in the insured population.
There is a growing trend towards less invasive screening procedures. One example is urine telomerase for the diagnosis of bladder cancer, which is currently being piloted in some markets. A simple urine test could diagnose the presence of cancer. The less invasive the test, the more likely that it will help to improve public health early detection efforts as well as increase the chances of better health outcomes. This would, however, also increase the incidence of this disease at earlier stages of severity.
Another useful example is the recent launch of a digestible digital capsule for colon cancer screening called Check-Cap. This may eventually replace colonoscopies, and it encourages easy adoption by the person for whom this sort of screening is recommended. Screening is good for the consumer but equally riddled with its own complexities for life insurers, particularly non-disclosure, policyholder expectations and multiple claims.
This article would not be complete if I did not mention the ever-constant threat (and perhaps opportunities) presented by genetic screening. Much has been written about this area of medicine, including the ability to readily access this type of screening outside of clinical supervision. It is also common knowledge that life insurance companies, both locally and internationally, already have guidelines for genetic screening. The more pertinent question to ask is whether the industry still enjoys sufficient protection, or is it time to revisit this issue given the recent renewed focus on genetic screening?
HIV home test kits
Regulators in the United States approved HIV home test kits two years ago, the first country to do so. Home test kits are now readily available in South Africa as well; however, it is worth noting that in this country there is no formal regulatory approval process for these test kits, so unsuspecting consumers could be accessing test kits of varying quality. The arguments about safer sexual behaviour that can potentially be prompted by a quick home screen are rapidly neutralized by the lack of scientific evaluation and rigor behind what consumers are being sold off the shelf.
From an underwriting point of view, this creates a situation where applicants could declare themselves HIV-positive based on self-testing when they actually are not infected with the virus. Life insurance applicants are routinely screened for HIV, but some abbreviated underwriting processes may just have kick-out criteria based on a response to a questionnaire. It is hard to know what the probability of this scenario is, but it makes for an interesting dynamic in an environment where the efficiency of life insurance application processes is quite topical right now.
Home testing also makes for an interesting claims conundrum. If someone filing a fraudulent claim had access to his or her HIV status in the privacy of their own home, that person may well come up with all sorts of elaborate schemes to try to access a payout against dread disease or critical illness benefits. Most life insurance companies that sell critical illness offer comprehensive cover for Accidental HIV. It is not difficult to imagine that companies will now have to be a lot more vigilant in reviewing these claims so that only valid claims get admitted.
Simplification of pathology tests
“Worldwide, one of the fastest growing aspects of clinical laboratory testing is point of care testing (POCT), estimated to be increasing at least 10-12% per year overall and upwards to 30% per year in some testing areas.” This is according to the 2010 College of American Pathologists (CAP) POCT toolkit. Pathology tests that were historically laboratory-based have become more ubiquitous outside the laboratory. The main drivers of this trend are the improvement in accuracy, affordability, and immediacy of the results. A practical example is Haemoglobin A1c (HbA1c), which was formerly the preserve of high-tech laboratories. A quick finger prick is now sufficient to give a proxy of blood glucose control in diabetics, with accuracy that is superior to urine dipstick or random blood glucose. This simple HbA1c test allows diabetics to take charge of their disease and adjust their medication accordingly. There are many other such point-of-care tests including, but not limited to, blood gases/co-oximetry, electrolytes, cardiac biomarkers, alcohol and toxicology (drugs of abuse), anticoagulant monitoring and stool occult blood.
This simplification of pathology testing is not a utopia where everything is simpler, faster and cheaper. There are very real challenges the life insurance industry has to contend with, namely the correct identification of specimens, quality control (inter-user errors), calibration of equipment and comparability between different testing techniques.
Medical gadgets and apps for consumers
Living in the digital age means that medicine is not immune to technological innovations. There is a myriad of gadgets, apps and devices that are increasingly becoming available so that ordinary people can access more of their personal health data. For example, a simple photograph of an eye in a smartphone can be sufficient equipment to perform detailed ophthalmoscopy that would historically have required a manned slit lamp. Within seconds a potential policyholder may become aware of a visual disorder, prompting her to actively seek healthcare intervention from qualified professionals but not before increasing the cover amount in her life insurance policy.
Wearable devices that track heart rate and rhythm could very well alert the wearer to heartbeat irregularities. This is clearly great news for the consumer as he or she would be able to get the necessary care. However, sometimes no healthcare intervention is required. Could this sort of self-monitoring with a wearable device change consumer behavior, or could it be the tipping point for those who are already prone to assuming the “sick role”? The truth is that we just simply do not know, but this type of behaviour could potentially manifest under the radar in short-term disability claims, hospital cash and sickness benefits.
Given current underwriting practices, there would be no prior knowledge that a consumer was accessing these types of gadgets. It may well be time for life insurers to integrate retention strategies, wellness promotion and client services so that they are a lot closer to their customers. If the data asymmetry created by health technology is not addressed, there is a real possibility that this chasm will continue to widen enabled by readily available technology.
Pharmaceutical product pipeline
Highly specialized agents like targeted therapy, biological agents and regenerative medicine address previously unresponsive chronic medical conditions. This area keeps evolving, and what was previously deemed to be a death sentence can now be completely kept under control through the correct treatment or even cured.
Chronic myeloid leukemia and hepatitis C are classic examples of the type of radical shift in survival curves due to the efficacy of biologic agents over a relatively short space of time. The pipeline for these types of biologicals is robust and should produce a few more agents registered with regulatory authorities like the Unites States of America’s Food and Drug Administration. Some forms of cancer and neurological conditions that were incurable will become manageable disorders, leaving life insurers with possible long durations of income protection and disability claims that were not factored in with existing pricing models because product developers assumed a different trajectory.
As mentioned previously, the march of these advances in medicine is constant. New and innovative ways of delivering healthcare are the norm. Life insurers have to somehow navigate this complicated landscape by balancing prudence, consumer friendliness and agility in product development pipelines.