The National Reinsurance Corporation of the Philippines (Nat Re, PSE: NRCP) hosted its 4th Annual Technical Forum (ATF) last September 14, 2018 at the New World Hotel in Makati. With the theme “Uncovering Insurance Opportunities”, the Forum convened industry experts to provide its attendees insights on new opportunities for non-life and life insurance products in the Philippines. In attendance in the life session were actuaries, underwriters, and marketing officers of Nat Re’s client companies, as well as product consultants, independent employee benefit brokers, and representatives from the Department of Health and PhilHealth, the administrator of the Philippines’ national health insurance program.
Transforming the model from “sick care” to “true health care”
Larry Hartshorn, Corporate Vice President and Director of LIMRA, delivered the presentation on trends in health financing/insurance in other countries. Hartshorn cited a study suggesting that healthy behavior makes up fifty percent of what makes people healthy and yet only makes up four percent of their spending on health and medical costs. He said that there is a need to transform the healthcare model from the primitive “sick care”, which is taking a reactive stance by treating people already with disease, to true health care, which is aiming to maintain good health through a continuous, proactive, and personalized approach.
Hartshorn pointed out that a significant contributor to this shift to true healthcare lies in encouraging pay-for-performance schemes which focuses on the quality and outcomes of people’s health and not the quantity they spend on medical services. He gave several examples of technology and health insurance programs that have transformed to this new model of health care in countries such as Singapore, China, Japan, and France. These new programs reward people for exhibiting healthy behavior and/or drive them to live healthier lifestyles which, Hartshorn adds, “is that shift to having people feel that they’re a participant” in health care programs.
Hartshorn also presented several advancements in medical technology innovations around the world particularly in the field of robotics, artificial intelligence, device technology, and telemedicine. All these have the potential to improve efficiency thereby lowering costs for the insurance industry. He added, “What these devices are [also] truly doing are [encouraging] better clinical outcome and motivating appropriate behavior—it’s win-win.”
Functional medicine as an emerging approach to managing health
Michael Angelo Genato, Group CEO of ROMLAS Health Group, delivered the presentation on trends in health financing/insurance in the Philippines.
Genato gave a brief overview of healthcare through the years and the nature of noncommunicable diseases. He cited a study suggesting that businesses lose $300 billion a year in productivity, brought on by employee absenteeism, tardiness, poor performance, etc. due to workplace stress and sicknesses. In the Philippines some companies still struggle to respond to this issue. “[Companies’] idea of a wellness program is so vague because they haven’t defined for themselves what health and wellness is,” Genato said.
Genato then discussed functional medicine, an emerging approach to managing health and wellness. He described the mechanisms of the practice which begins by considering health as a continuum with disease at one end and optimal health at the other. “The bigger question to answer is where our policyholders are in that continuum,” Genato said. “In insuring them and in trying to manage healthcare, I believe this is one of the first things that needs to be measured.” The approach then follows a comprehensive five-step process of profiling, probing, measuring, planning, and monitoring to allow a team of experts to personalize a health program per individual.
Genato shared several successful cases of the approach both in the Philippines and abroad. He said that functional medicine does not alter our DNA, which determines twenty percent of our health outcomes but instead “alters the genetic expression…which can be influenced by your food and lifestyle, and how you eat and sleep.”
Genato talked about a dashboard his company developed where employers can collect information from the functional medicine process per individual, make sense of it in the context of the whole workforce, and create “a catalyst for gamification”. He said this data from this dashboard can be attached to employee benefits and help human resources teams develop wellness programs for employees.
Call to insurers: Focus on every segment of maintaining wellness
When asked how functional medicine will affect the health insurance system in the Philippines, Genato commented that functional medicine practitioners may have to settle with private practice first (i.e. non-insurance based) just as how it is done in the United States. One challenge, Genato said, is that since there is no global regulating body for the approach, functional medicine is still “abstract” to several groups. He noted, however, that there are efforts in the Philippines to get institutions to be more aware of and support functional medicine.
Vic Tanjuakio, Head of Life Reinsurance of Nat Re and moderator of the panel discussion, pointed out that most healthcare trends presented by the speakers are exclusions of existing insurance products being offered in the Philippines. Tanjuakio posed the question: “Given the context of the coverage [of these products], where do insurers start?”
Hartshorn said that while medical practitioners and insurers should not stop treating diseases or covering these treatments, there must be efforts to “focus on… every segment of maintaining wellness.” He added, “Whatever clinical study, pharmaceutical piece, or [for instance] functional medicine, if it’s done in the wellness focus, that’s where we start.”
Hartshorn also stressed that the non-insurance, private insurance, and public or social insurance models of financing healthcare must complement and augment each other. “The financing of healthcare is a global financial crisis,” he added. “Not one of these is going to solve it alone.”
Genato agreed with Hartshorn in that insurers should explore including more of these wellness practices. “The conversation piece is really being able to change our paradigm,” Genato said. “We are so accustomed to an idea where we are exclusive—that’s what has created this great divide between wellness and disease management. Why not bridge that gap and allow wellness practitioners to work with medical
“Assume we don’t know then ask the right questions”
When asked about how insurers should craft their value proposition given these new healthcare trends in the Philippines, Genato suggested following the process being done in functional medicine. “We start by assuming we don’t know. We ask the right questions, and solve the issues of where the [market’s] pain points are,” Genato said. Insurers can then use this new information gleaned from asking more questions to develop riders to existing policies.
On the barriers to excluding alternative medicine and other approaches to medicine in the health maintenance organizations’ packages, Genato remarked that the “anecdotal” and “ambiguous” nature of the practice of alternative medicine makes it difficult to regulate it and set criteria or metrics for its use and success. However, Hartshorn noted that the insurance and healthcare industry have taken a step forward in quantifying the success behind approaches such as alternative medicine. “In today’s information age, with analytics, the proof of alternative medicine and some of the more common practices is there,” Hartshorn said.