Mobile Technology May Help to Lower Your Health Insurance Premiums in the Future

By on June 3, 2014

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For the past few years, car insurance companies have supported the principle that safer drivers should pay lower premiums by utilizing technology in your vehicles that can help you reduce risk or provide evidence in the case of an accident. Insurers are reading the GPS , on-board video camera and engine read out to assess the risk of a driver and lower premiums when less risky behaviors are observed.

While health insurers use technology to pay claims and enroll members, they haven’t fundamentally changed the dynamics of how health insurance is offered and used, but that may be changing. What if in return for a much lower premium a health insurer offered a policy that integrated technology into the policy provisions directly and in a way that changes how policyholders managed their health and interacted with providers, pharmacies and insurers to find the best values, track health and even pay their out-of-pocket expenses electronically? In other words, technology usage becomes an integral part of the policy provisions, it’s not just pasted on.

What if you could snap a photo of your rash, track your healthy eating and exercise habits, or monitor your heart rate in real time and send it to your doctor? That’s the idea behind a new breed of apps and devices that increasingly put medical tools in the hands of consumers.

Now, by taking advantage of a new generation of technology designed to help fitness buffs keep track of every step taken and calorie burned, the health insurance industry is suddenly in a position to enforce its own version of that maxim. The result is a profound change to the way health insurance will be offered in the coming years as companies utilize a flood of previously unavailable data to reward more physically active customers – and, in effect, punish inactive ones.

Apps Offer More Participation, Self-Managed Care and Improved Data Analysis

Mobile apps for smartphones and tablets are changing the way doctors and patients approach health care. Many are designed for the doctors themselves, ranging from handy databases about drugs and diseases to sophisticated monitors that read a person’s blood pressure, glucose levels or asthma symptoms. Others are for the patients—at their doctor’s recommendation—to gather diagnostic data, for example, or simply to help coordinate care, giving patients an easy way to keep track of their conditions and treatments.

Many of the apps are useful time savers, and have the potential to make health care more efficient by speeding diagnosis, improving patient monitoring and reducing unnecessary visits to a physician or hospital. Still, the field has a way to go, doctors add, particularly when it comes to making good use of all the patient data being generated.

Improved Access to Care

In a digital age, the requirement for patients and doctors to be in the same location is eliminated. Patients suffering from chronic diseases who live in rural areas or otherwise have limited access to doctors will be able to “visit” with primary care physicians or specialists located in the next major city or a half a world away. Increasingly, the patient will be in his or her home.

Instead of having the government or insurance companies dictate that a visit must be in person, which may be either unnecessary or dangerous (for frail elderly patients), patients and physicians will decide together when a visit is best done live and when health care services can be delivered virtually.

Improved Patient Engagement

Many aspects of healthcare discourage patient engagement – long lines, complexity, lack of transparency of cost and quality. Much of this is unnecessary. Why should accessing health care require a painstaking wait in the physician’s office? You could easily be notified via text that your physician is running late. Apps can eliminate complexity.

Imagine you are using a medication reminder app that knows how many pills you have taken and when you will take them next. It “knows” you are running low on pills and it automatically asks whether you want to pick up your prescription at the nearest Walgreen’s (because it “knows” your location and where your prescription is on file) or would prefer it mailed to your home. One simple answer and it automatically places the prescription for your chosen delivery method and charges your HSA.

New Provider Advantages

The explosion of inbound data from sensors and devices will create new opportunities for healthcare professionals. Today’s healthcare services and business models are ill-suited to a system dominated by an influx of patient data. Expect the need to manage inbound data to create a new set of companies focused on data management. Large call centers will house nurses, doctors, pharmacists and other healthcare professionals who watch, manage and respond to this inbound data.

In addition, digital health apps will allow providers to effectively manage and coordinate patient care in a complex environment. This will be critical as the government and insurance companies increasingly “bundle” payments and determine other ways to shift risk to providers.

Reduced Fraud

My experience is that Medicare is terrified of an explosion of costs that could result from digital interactions, primarily due to the increased patient access to care. However, the more impactful consequence of digital health will be in reducing fraud, currently estimated to drain about $60 billion annually from Medicare. One simple reason is that digital apps have an amazing ability to track people and transactions in space and time.

In the future, digital apps will allow Medicare to correlate claims data with location, and time data from the digital health apps to look for fraud. Imagine visiting a pharmacy – one of the most common locations for Medicare fraud – scanning in your Medicare card and conducting your purchase digitally. An app would allow Medicare to instantly trace that transaction. Hotspots of activity could be identified and investigated in real-time rather than months after the money is in the criminal’s offshore bank account.

Improved Patient Health & Safety

Digital apps will make health care safer by giving patients tools to manage their own health. Today, patients leave the hospital with a stack of papers and very little memory of what they’re supposed to do when they arrive home. Imagine if all the information you needed for a safe and healthy recovery were handed to you on an app.

You could tend to the most urgent tasks and the one or two items most important to remember – and the app would take care of the rest. Apps can remind you to take pills, monitor side effects and transfer the knowledge to your provider. This would be a huge advance for patient safety. With the help of a smartphone, a software application and a portable device that reads a person’s heart rhythm or blood pressure, doctors and patients can get an instant reading with alerts to be sent to automatically call for support in the event of an emergency.

In the future, everything that can be done digitally will be done digitally. Digital health apps will schedule appointments, tell you when the doctor is running late, help monitor medications’ side effects, and help you follow your care plan accurately. These changes will engage patients with their health and healthcare in new ways. It will also radically reform health care delivery.

Given the link between mobile apps and personal data , it is not difficult to imagine a world where the standard Affordable Care Act approved health insurance policy monitors your activities and constantly updates to reward active individuals making healthy choices with lower premiums. This offers great incentives for people to make smart, less risky lifestyle choices which may in turn, bring down the cost of health insurance for taxpayers, business owners and providers.

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About Scott Ho

FSN insurance and retirement journalist - Planning for your retirement or understanding your insurance needs can be confusing and difficulty. Scott knows these tasks can seem daunting. He offers his experience to make choosing insurance coverage and planning for your golden years a successful endeavor. Connect with Scott at !

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