How the DIY diagnosis will shape insurance

I recently stumbled on this site, which is crowdsourcing voices as part of a study to determine whether Parkinson’s disease can be detected by analysing phone-quality voice recordings. The research aims to build on recent studies that successfully demonstrated that the disease can be diagnosed by analysing speech recorded using high quality audio devices. The hope is to develop an app to test for Parkinson’s disease.

The rise of low cost diagnostic testing has the capacity to transform the insurance industry in a number of ways.

Genetic tests open up the opportunity for more individualised care. In 2013, Angelina Jolie publicly announced that she had undergone a prophylactic procedure to remove her breasts because she faced a heightened risk of breast cancer as a carrier of a defective BRCA gene (the gene produces proteins responsible for supressing tumours). In the coming months, screening of the defective gene rose by 37%. Three years later, New Zealand health insurer, Southern Cross, introduced an allowance to enable high risk members to seek prophylactic mastectomy treatment. Amongst the eligibility criteria is a positive genetic test confirming a defective BRCA gene.

Low cost testing also creates the opportunity for earlier diagnosis and treatment. In the case of some degenerative disorders, such as Parkinson’s Disease or Multiple Sclerosis, early symptoms are generally vague. Low cost testing provides an opportunity to screen patients for a broader range of conditions at an earlier stage, bringing forward diagnosis and treatment. Health funders, including the public sector, are generally reluctant to cover routine screening on the basis of cost-benefit. However, the value equation is changing as tests become more cost effective. Shameless promotion: Sovereign Private Health Plus provides a $500 health screening allowance (every three years after three years).

Finally, the availability of at-home diagnostic tests allow people to screen themselves in the privacy of their own home. We are familiar with at-home pregnancy tests but did you know that you can now screen yourself for HIV, Hepatitis, or elevated cholesterol? Whilst the democratisation of medical information is empowering, it does create disclosure risks for the insurer: information gained outside the traditional medical system may be undiscoverable to insurers, which increases the opportunity for anti-selection. The insurance system cannot function efficiently if customers avoid disclosing known risk factors.

As with any new technology, changes in diagnostic medicine bring both threats and opportunities. The challenge for insurers is to find a way to embrace these developments to enhance, rather than restrict, the customer value proposition.

Author: Len Elikhis

The financial services industry plays an important role in securing people's futures. I have a strong interest in improving financial literacy and delivering sustainable customer solutions in my role as Chief Product Officer at Sovereign, New Zealand’s largest life insurer. A qualified actuary, I was part of the leadership team that transformed Sovereign’s health business and have worked for MLC and Deloitte in Australia.

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