‘Wearables’ are a new trend in the consumer electronics industry. They are miniature electronic devices that are incorporated into items of clothing or accessories and can comfortably be worn on the body. There are numerous opportunities for wearables in the Healthcare domain, some of them include fitness and wellness tracking, telehealth, and emergency remote healthcare assistance. Among the various healthcare players who could benefit from wearables, Health care insures (payers) are the ones who can best monetize these benefits. Analyzing data extracted from these wearables can help improve patient care and reduce expensive emergency healthcare costs, however there is a need for a reliable infrastructure to maximize the potential of such data. Thus, more highly secure IT systems that enable seamless data processing and reduces the risk for insurers as well as optimizes premiums for clients, need to be built.
Why should you think of wearables right now?
The demand for wearables is increasing at an astonishing rate. Transparency predicts the global wearable market will grow at CAGR 40.8% during 2012-18 to reach $5.8 billion. According to PWC‘s U.S. research project, 20% of American adults already own a wearable device and the adoption rates are expected to be on par with tablets. Thus the U.S. is a key market place for this technology.
The study further reveals that 53% of millennials and 54% of early adopters are excited about the future of wearables. Early adopters include, those in the medical industry, the wellness and fitness industry, the military, and the infotainment industry.
Wearables are particularly attractive in the healthcare industry. Healthcare payers can use the data from wearable devices to determine premiums. Data driven premiums offer multiple benefits, such as:
- Reducing risk: Clients who are less exposed to illness and diseases will pay a reduced premium
- Increases the ease for the client: Dodge annual medical examination procedures
- Customize products: Develop products based on individual requirements rather than offering a bucket of standard products to choose from
- Increase loyalty: Build trust by maintaining data security
Because of these benefits, wearable use in U.S. healthcare will be paramount in shaping the global market place. The use of wearables in the healthcare domain might also accelerate the use of new analytic systems, which can reduce the operating cost, develop preventive measures and reduce risk.
Not a cakewalk for Healthcare payers
Despite all of the benefits many Americans have privacy and security concerns. In fact, according to PWC’s study 80% of the respondents are concerned about privacy and security breaches. Another concern, inhibiting adoption is price. A survey by Technology Advice indicates that some of the common reason for not tracking fitness are lack of interest and concerns of over cost for these devices. These fears make can make it difficult for healthcare players to leverage insights from wearable technology.
The battle can be won if wearables brand image is transformed from merely hygiene to an essential consumer product. This can be achieved if:
- The tracking device is provided by a physician
- The use of the device offers reduction in health insurance premiums
- Customers are promised better healthcare advice
Some insurance and healthcare providers have already started investing in such solutions to attract the millennial customers. Oscar Health Insurance and Misfit, a wearable-device company, have announced their plan to develop a program that links customer biometric information to their health insurance plan. Companies have also started using wearables to trim their insurance bill. British Petroleum (BP) has given Fitbit’s fitness-tracking bracelet to its employee to earn points and reduce the health insurance cost.
What makes Payers more ready?
Insurance companies should develop products linked with wearables to gain an early mover advantage. As customers feel safer and more comfortable using wearables issued by their employers, insurance companies might use corporate platforms to test their products.
As the premise for successful use of wearable devices is data security, insurance companies should implement efficient software and mobile apps (which can get approval from FDA) to gather and process volumes of data generated by wearable devices. These systems should allow the insurance companies to seamlessly coordinate with the healthcare providers, thereby reducing the risk and expense of the company.