By Dr. Karsten Neumann @kjn3110 ‏(Partner) and Dr. Ulrich Kleipass @UKleipe (Principal) at Roland Berger

The digital revolution has reached the health sector and it has the potential to change the way society deals with health care. The current advancements through InsurTechs in technology and the growing pools of big data are not only empowering us to a predictive and personalized medicine, which allow a more appropriate and therefore more effective treatment. They enable patients to monitor their health through apps and wearable devices themselves, and telemedicine, chatbots and sensors make their lives easier and the health system as a whole more efficient. However, InsurTechs in Germany is still facing challenges and the German health care system in general needs to overcome a number of inhibitors that currently keep progression from happening:

1: The healthcare system still lacks connectivity and a uniform record

Without doubt, the entire infrastructure of the healthcare industry could offer tremendous benefits by being equipped with learning algorithms of artificial intelligence, which interpret the data in the first instance and prepare for the further treatment of other healthcare providers. Yet, the healthcare system is currently one of the least digitalized sectors. Data is generated everywhere, but each provider offers its own way of capturing it. Digital silos prevent a unified digital medical record from becoming a reality. A joint data-pool and uniform interface is needed to stop the fight for data and allow companies to start creating true value out of it. A concrete first step would be to define a general structure and standards for data exchange and oblige all players to use it. Then, individual players could build up electronic health records which collect and structure the data in a meaningful way. InsurTechs could be a driving force in this development as they have the neutrality and are less associated with a political agenda.

2: Lack of standards prohibit nationwide implementation

The development of digital applications and technologies is largely left to the market. This is desirable from a regulatory perspective, but has led to the emergence of heterogenous technical standards. The lack of interoperability of the various interfaces and applications makes it almost impossible for a comprehensive networking of all market participants to happen. Therefore, setting common standards at national level is a prerequisite for the successful expansion of digital applications. Here, we propose big players from various sides should sit together and try to define a joint platform with fixed standards for data security, interfaces etc.. Examples from the banking industry have shown that FinTechs can be a pace-maker in this development (e.g. N26 with video-ident) as they leverage what the customer really wants and develop solutions mostly in a customer-centric way.

3: Neverthless, InsurTechs still have serious problems in getting a foothold in healthcare

Digital offers from start-ups often only target smaller groups at a high price and thus prevent the implementation in the statutory health insurance (SHI). As a result start-ups are currently experiencing severe problems entering the payroll process of the SHI. This is why health insurance companies need greater flexibility from the government to try new forms of care and thus get the necessary funds to allow for the support of the product offering of start-ups. Additionally, there should be a way for digital solutions to become part of the general healthcare provision, just like a new drug or medical device. Only if there are reimbursement measures for digital innovations in health care for the benefit of the patient, they will be accepted. On the other hand this of course also means that InsurTechs need to get up to speed with the remuneration system of the industry: Only focusing on B2C is not enough!

Some examples in which this has already worked successfully are the Digital Health start-ups Sonormed (hearing tests), Pelvina (pelvic floor exercises) and CardioSecur (personalized EKG), whose products and services are reimbursed entirely by the statutory health insurance companies. This is a start in the right direction, but we’re still a long way from a functioning reimbursement system. We suggest, that the government rapidly implements rules for market access and access to reimbursement similar to the rule for drugs and medical devices.
To revolutionize healthcare in the future, a central data pool must be formed, standards must emerge and more innovations must be able to be integrated into the repayment process. Health insurance funds, government agencies and providers of services and products must engage in a dialogue to jointly solve these problems and turn digital medicine and eHealth from a number of standalone applications into a functioning system. InsurTechs can be the critical element that will really get this development going as they can provide the innovativeness and customer-centricity that makes this system more attractive for end customers.

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