Health insurers need to innovate

In New Zealand, and around the world, established industries are coming to terms with the opportunities and threats – perceived or otherwise – that disruptive new innovations and technologies stand to have for traditional business models.

For bricks and mortar retailers, it was the advent of e-commerce and online retail channels. For DVD stores, now all but obsolete, it’s been the popular uptake of content streaming platforms such as Netflix and Amazon Prime.

In the coming years, we can expect to see meat producers grappling with the impact of realistic synthetic meat alternatives; automobile and ride-sharing industries adapting to evolving driverless technologies; as well as any and all businesses seeking to capitalise on the opportunities afforded them by Artificial Intelligence (AI) and Augmented Reality (AR) technologies.

Despite their many and varied applications, these innovations and technologies are, without exception, united on one point – they challenge the status quo in the name of delivering a superior customer experience.

They seek to offer consumers a greater level of choice, convenience, quality, transparency, accessibility or cost-savings, than traditional business approaches and models could ever make possible.

There are still a few industries that have yet to feel the tangible impact of this constant drive for innovation and disruption - that have been able to continue on as they always have, without the imperative of finding a better way of doing things for their customers.

New Zealand’s health insurance sector is arguably one of them.

Compared to a number of other OECD countries, New Zealand is fortunate in the level of public healthcare we receive. Although in many instances there may be a significant wait period, ultimately, you can and will get the care you need via the public health system.

This has meant that for the majority of New Zealanders, private health insurance (PHI) has traditionally been considered a luxury rather than a necessity – and for the longest time, local health insurance companies have positioned themselves as such, with premium price points to match.

Traditionally there has been little to set the major players apart from one another, with the extent of consumer choice predominantly being in the decision to either take out PHI, or not, rather than selecting from a range of differentiated providers to find the one which best delivers on their individual needs.

That’s how it has always been, and without any true risk of “innovate or die” for PHI providers, that’s how it was set to continue.

But, in reality, New Zealand’s PHI sector has a responsibility and opportunity to drive disruption and innovation – to better complement the services offered by our public health system, and to help deliver greater choice and more positive health outcomes across the board for Kiwis.

In fact, for an industry with such a critical part to play in ensuring the health and wellbeing of a country’s population, complacency can be dangerous. And Kiwi consumers deserve better.

New Zealand’s PHI industry has a responsibility to offer consumers a greater level of choice – such as trialling offers that give them the opportunity to switch providers or opt into insurance, without the nuisance of an extended stand-down period on pre-existing conditions.

We have a responsibility to reduce barriers to healthcare in general – like offering free dental and health checks out in the community; by pioneering cost effective group schemes for communities; or by offering new direct-to-consumer purchase options and making PHI more affordable. .

We have a responsibility to create greater transparency throughout the healthcare sector by empowering customer choice and improving customer experiences through the introduction of provider platforms and chatbot tools that can answer customer queries reliably, and immediately; or through the implementation of fully automated claims processes.

And we should question the widespread perception that health insurance is there just for the “big stuff”. We must empower and enable consumers to make the most of their policies for anything from GP, dental and optometrist visits, to mental health consultations, to obstetrics, through to surgery. We must support customers with their everyday health concerns, so we can catch the “big stuff” before it becomes serious.

Without the threat of “innovate or die”, health insurance providers need to innovate and disrupt in the name of delivering a superior consumer experience, and better health outcomes for New Zealand. Because when it comes to the health and wellbeing of our population, the status quo isn’t enough.

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