Why you should care
Because insurers may soon gouge us even more.
Puffing on cigarettes, downing whiskey and eating trash may not only cost you cold hard cash and lead to poor health, but it may also mean ballooning health insurance costs in the not-too-distant future.
How is it socially justifiable that a fit, well-nourished person (who’s already shelling out for vitamins, healthy food, gym memberships and sporting equipment) should pay the same in health insurance as someone with an unhealthy lifestyle? Insurers are poised to change this: Within the next 10 to 20 years, I think an enormous amount of data that health sensors, trackers, wearables and artificial intelligence gather about us will revolutionize health insurance and the financial structure of health care.
Today’s Health Care Systems Are Unsustainable
The yearning for change stems from the fact that the present health care systems are not sustainable. According to the predictions of the Organization for Economic Cooperation and Development (OECD), public expenditure on health and long-term care in OECD countries is set to increase from around 6 percent of GDP today to almost 9 percent of GDP in 2030, and to a whopping 14 percent by 2060. Who will finance these hikes? The already tightly budgeted welfare states, super expensive private care facilities or taxpayers?
Insurance companies will use these data points as excuses to raise premiums for high-risk patients or to reduce their business risks by alerting patients about bad lifestyle choices.
In countries with private health insurance, some treatments, like cancer care, are so expensive that only the privileged with good insurance plans can afford them. In countries with socialized medicine, where everyone has access to basic care, new innovations are hard to roll out nationwide because the system cannot afford it. Maintaining health care systems and funding future medical advances will be difficult without major reforms.
Why So Unsustainable?
There are many factors driving up the cost of health care: the prices of technological innovations in new drugs, devices or procedures; aging societies and demographics; health insurance itself. But one of the key factors is the health care status of the population. And that does not look good. Our own laziness could effectively kill health care.
People are simply not motivated to be healthy. They don’t get reduced health insurance premiums for doing so, and the health care system is focused on treating diseases instead of preventing them. Moreover, even when the obvious negative consequences of lifestyle choices (like smoking) are proven, it’s hard to persuade patients to stick to healthy choices. How many New Year’s resolutions did you make about going to the gym? And how long did you stick with it?
From the other side of the table, health insurance is one of the riskiest businesses nowadays. No matter what details companies need about insured patients, they cannot get enough information to make fully informed investments in a person’s future health. Companies can obtain data on a patient’s gender, age and some basic details about lifestyle, but as they cannot measure any health parameters, the value of the investment remains questionable.
Big Data Is Coming!
Roughly 100 million units of wearable tech to measure health parameters were sold in 2015. By 2019, that number is expected to soar to 245 million annual sales. And that’s just the beginning. Digital tattoos can measure data and notify the user when medical supervision is needed without the user’s active participation. When AI-based algorithms start to browse patients’ health data, they will discover new correlations and long-term consequences. Insurance companies will use these data points as excuses to raise premiums for high-risk patients or to reduce their business risks by alerting patients about bad lifestyle choices.
Oscar Health has already got the ball rolling: Its U.S. patients get Amazon gift cards as rewards for achieving their daily goals as measured by a Fitbit activity tracker. As more accurate data sets about our lifestyle become available through trackers and wearables, it is inevitable that insurance companies will try to use them. This raises many questions about the privacy of patient information and the currently hidden imbalances in the health insurance system. But how will insurance companies treat their clients? Will they punish you for free-riding or will they reward you for being an obedient citizen for your own good health?
Discrimination Based on Lifestyle Choices
In a dystopian scenario, companies would provide patients with insurance only if they are allowed access to all of the patients’ data — from sleep and fitness trackers to blood pressure and electrocardiogram readings. Based on the information, companies would be able to either change patients’ premiums or notify them about pending changes based on their lifestyle choices. Choosing a big steak instead of something more suitable, or being too lazy to exercise, would mean higher premiums. Whatever you do and whatever decisions you make, in other words, will impact your insurance.
And what if insurers could discriminate against patients if they have medical conditions that are determined to be predominantly genetic, not lifestyle-related? Companies could require employees to provide genetic test results. A U.S. law, the Genetic Information Nondiscrimination Act, was meant to fight against such bias, but what if new insurance-related legislation changes it?
Look on the Bright Side
Insurers could offer more personalized therapies and plans based on patients’ data. They can reward those who live a truly healthy life, while making those who continue to smoke or not exercise pay more. This way, living an unhealthy life would remain a personal right, but it would also become a luxury to balance out the huge costs they add to the health care system.
To avoid dystopian scenarios, governments and regulators should understand the technological advances and their policy implications much better than they do today. On the other hand, each and every one of us should pay attention to crucial changes in medicine and health care … lest we wake up one day to find ourselves under the omnipotent gaze of Dr. Big Brother.