Transforming health insurance with technology: A look into India’s digital healthcare future

The Indian health insurance sector is experiencing a powerful transformation driven by technological advancements and regulatory policies. Health insurers strive to adopt the latest technologies to be future-ready and achieve long-term efficiency. The ultimate goal of these changes is to democratize health insurance, reduce costs and provide better service to beneficiaries while improving their overall health.

As we look to the future, five tech-enabled trends will reshape the health insurance landscape in 2023 and beyond. These include:

1. Rapid rise in automation of claims processing: Healthcare claims have been surging and insurers are struggling to keep up with the demand. The Insurance Regulatory and Development Authority of India (IRDAI) mandates that health insurance claims must be settled within 30 to 45 days, leaving little room for error. With a workforce alone unable to meet these needs, health insurers and Third-Party Administrators (TPAs) are turning to automation as a solution. By utilizing real-time channels, Optical Character Recognition (OCR), Artificial Intelligence (AI) / Machine Learning (ML), rule engines, and Robotic Process Automation (RPA), healthcare payers can streamline their claims processing workflow to meet the accelerating demand. Automation not only minimizes operator errors but also improves the overall processing accuracy, allowing for faster settlement and touchless, real-time processing in some cases. Hospitals also benefit from a reduced payment cycle, but they need to submit cleaner claims to enable this automation. In short, automation of claims processing is a game-changer in the healthcare industry, allowing for more efficient and accurate processing while meeting the growing demand for healthcare claims.
2. Cloud and AI/ML lead the way for technology transformation: Health insurance companies are on a mission to future-proof themselves by embracing cutting-edge technology. To achieve this, they’re scaling up their infrastructure and adopting cloud-based solutions for increased agility and scalability. One of India’s biggest health insurers has already moved its entire core systems to the cloud, including production data centers, while public cloud platforms like Amazon Web Services (AWS) and Google Cloud Platform (GCP) are tailoring their offerings to meet the growing demand.  In addition to cloud adoption, health insurers are actively leveraging AI/ML technologies and advanced analytics to transform their service architecture and enhance the customer experience. AI/ML offers a myriad of use cases, from policy issuance to analytics-based nudges for guided selling and effective outreach. Further, with false and fraudulent claims accounting for 15% of total health claims annually, AI/ML solutions are a valuable tool in detecting fraud and irregularities.
3. Revolutionizing healthcare cost containment with digital tools: The highly competitive health insurance market in India has prompted insurers to focus on cost containment. IRDAI has proposed a cap of 35% on Expenses of Management (EOM), urging insurers to reinvent their shopper portals, automate lead capture, and explore new-age distribution channels like Paytm for direct-to-customer sales. Telemedicine and home healthcare are leveraged to prevent costly hospitalization and emergency room visits. Health insurers are also gradually adopting technologies like blockchain, RPA, WhatsApp integration, and AI chatbots to lower administrative costs. As the government aims to achieve Universal Health Coverage for all by 2030, these digital tools and strategies could play a vital role in reducing premiums and enhancing care delivery.
4. Health insurers will join hands with wearable tech makers to promote wellness: The rise of non-communicable diseases (NCDs) has become a significant concern for India’s healthcare system, accounting for 65% of deaths in the country. The economic burden on middle- and low-income groups due to Out-of-Pocket (OOP) expenditures for managing chronic conditions is also substantial. Health insurers are realizing their responsibility to promote member wellness and are partnering with wearable device makers like Fitbit and GOQii to offer personalized health coaching. Wearables and other interconnected devices like sensors, monitors, and cameras facilitate Remote Patient Monitoring (RPM) by gathering vital parameters in real time, helping to bridge the infrastructural gaps in the system.

RPM solutions like smart glucometers are beneficial in chronic disease management, reducing the need for frequent hospital visits. Insurers and hospital groups are collaborating with wellness platforms like HealthifyMe and digital therapeutics firms like Wellthy Therapeutics to offer wellness programs, including smoking cessation, stress management, and disease management.

5. Interoperable digital health records will be key for revolutionizing healthcare: 

Despite significant technological advancements, the healthcare sector still relies heavily on manual and complicated processes due to the lack of standard data exchange protocols. To achieve Universal Health Coverage, India needs an interoperable digital ecosystem, and the Unified Health Interface (UHI), a central government-backed initiative under the Ayushman Bharat Digital Mission (ABDM), aims to facilitate this. The ABDM’s unique health ID, called ABHA, enables easy access to medical records and health history nationwide, allowing for seamless care transition. ABHA can potentially revolutionize healthcare in India, just as UPI did for payments. The immediate focus for healthcare providers and insurers should be on adopting standard code sets, like ICD-10 and CPT, and data exchange frameworks like Fast Healthcare Interoperability Resources (FHIR). They must evaluate their system capabilities, the underlying infrastructure, and the associated data governance policies to embark on their interoperability journey. While some health insurers are already embracing an API-first strategy to facilitate faster data exchange, tech giants like Google and Microsoft are offering solutions to bridge interoperability barriers. With the help of other technologies such as Natural Language Processing (NLP), digital health records have the potential to enhance clinical documentation, accelerate clinical decisions, and provide comprehensive care to patients.

In India, the integration of technology in the healthcare insurance sector is changing the landscape of the industry. The adoption of automation, AI/ML, wearables, and digital tools for cost containment, along with digital health records and interoperability, is transforming the way health insurers work. These trends aim to democratize health insurance, reduce costs, serve beneficiaries better, and improve overall health outcomes. The benefits of tech enablement in the healthcare insurance sector are immense, and it is an exciting time for the industry.