Enterprising Developments

How the Cloud Could Transform the Role of Health Insurers

Joe McKendrick
Insurance Experts' Forum, April 27, 2012

The headline over at Forbes.com, “Could Computers Replace Health Insurers?”, certainly is an attention-grabber. Neal Patterson, CEO of healthcare IT firm Cerner, is quoted by Forbes' Matthew Herper speculating that insurance companies—at least in the healthcare sector—will eventually be acting "as intermediaries between governments and consumers, and the providers of medical care will be replaced by a new middle layer of cheap and powerful computers."

As Patterson put it: “About a third of healthcare never gets to healthcare delivery. Instead, it gets consumed in this high-friction middle. I broadly envision a new middle that is a frictionless system. Instead of taking 20 percent to 30 percent of the dollar it should be operating in single digits. This should be consuming less than a dime of our healthcare dollar.”

Patterson goes on to make an interesting observation: that part of the plight of today's healthcare delivery system is that it's a reactive model that pays and pays and pays for doctors and emergency room visits—fee for service. The system should be more of a predictive one that treats healthcare more holistically and puts intelligence into financing mechanisms. Technology can make this possible.

Patterson sees insurance companies assuming the role of managing the intelligence layer that provides healthcare practitioners a much more complete picture of patients, thus encouraging more wellness and preventative care.

Prevention and prediction is nothing new for the industry, of course. On the P&C side of the industry, many insurers have taken leading roles in research and advocacy for increasing automobile safety and fire safety.

What will be increasingly demanded within health insurance enterprises—and continue to be demanded within P&C carriers—are analytical capabilities, and thus systems, that help carriers better understand risks and prevention. There is a lot of work ahead to build these systems.

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at joe@mckendrickresearch.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

Living with the Internet of Things (and crowd funding)

The Internet of Things has it’s teething problems.

6 Technology Priorities for Individual Life Carriers

While many aging, generally mainframe-based systems, remain capable of supporting basic policy processing and accounting functions, the costs associated with enhancing them are becoming increasingly problematic.

With Google Favoring Mobile, Will The Industry Take it Seriously?

Google’s search engine will now will favor mobile friendly content over traditional website content; within the insurance industry, the greatest initial impact is likely to be felt by insurance distributors.

Why Some Technologists Get Cold Feet on Mobile

There are those who believe that favoring one channel or mode over another will lead to even more silos and dysfunction than we already have in many organizations.

Insurance IT Spending and Budgeting Benchmarks

New research from Novarica highlights areas of concern and offers insights on insurers spending and budgeting decisions.

Enterprise Mobilemania Continues Unabated

More than half of companies are spending more on developing mobile applications -- but are they more efficient?