Health Insurance in the Post-Death Age
Written by Paul Auburtin and Coralie Delettre, November 10th 2017
Several new technological and scientific advances, grouped under the acronym “NBIC” for Nanotechnologies, Biotechnologies, Information technologies, and Cognitive sciences, are revolutionizing the horizons of medicine and healthcare. Biotech tools like CRISPR CAS-9 might hold the key to disease prevention for a variety of medical conditions; nanotechnologies can be deployed for new treatment delivery, therapy or diagnostic techniques; and big data and artificial intelligence allow us to know more about ourselves and others than ever before, predict or diagnose illnesses, and could be used to automate care.
These developments foretell a paradigm shift in the way we approach medicine and health: from therapy to enhancement, from curing illnesses as they occur to systematic improvement and optimization of the human body. Entrepreneurs and business leaders have noticed, and are seemingly embracing the once radical idea of Transhumanism, a cultural and intellectual movement that believes we can, and should, improve the human condition through the use of advanced technologies. Google’s Calico, or the Bezos and Thiel-backed Unity Biotechnology, all have at their core the goal of extending life, potentially to the point of eliminating death altogether.
There are many issues to explore in relation to this shift, having to do with ethics, security, or the economy. One of the important and more practical impacts it will have is on our system of health insurance: as it becomes possible to eradicate illnesses and extend human life, how can health insurance providers adapt? What does the paradigm shift imply for current models of insurance?
The current business model of health insurance companies is based on the transfer of a risk (accident, illness, death) by an individual payer to a third party. Yet in this model, the probability of a risk to occur does not change, it is just redistributed across a larger portfolio. In general, payers contribute jointly without knowing if they are going to get sick or not. In addition health insurance, as opposed to other insurance models, is designed not only to turn risks into fixed expenses but also to shift costs across individuals, from the sick to the healthy.
However, with the rise of NBIC, transhumanism and the significant decrease in risks they entail, come new challenges for insurers. The ongoing technological innovations enable a better allocation of treatments to patients, with more effective delivery systems (through Big Data) at lower costs (through automation of care), and diseases can now be predicted more easily. Therefore, insurance companies need to evolve from a curative business model to a more predictive and preventive economy, with personalized and anticipative contracts, which essentially aims to maintain individuals in good health.
Insurance companies that fail to adapt to the changing nature of the health economy into the new model of “Prevention as a Service” will disappear. They are already being challenged by new competitors coming from the tech industry, with high expertise in customer experience and in the use of data. In the short term, the strong regulations that weigh on the insurance sector and the legitimacy they enjoy among the people are still strong barriers to entry.
In the longer term, challenges to the very concept of medicine, health and the human body could render irrelevant the idea of health insurance itself. In a future where we have complete control over our bodies and are capable of neutralizing harmful genes before the diseases they carry manifest themselves, investing in health insurance might seem superfluous.
Still, the future that the likes of Calico and Google are imagining is one in which the longevity of human life will be greatly extended — perhaps even to the point of immortality. In that context, humans will still be facing risks and uncertainties extended over a longer period of time. Considering the role that new technologies will be playing in enhancing the human body, insuring our health is likely to become more akin to insuring a car, considered a type of low-risk insurance. Health insurance today has a redistributive aspect — it is based on the assumption that different individuals inherently don’t face the same risks of getting sick and have little control over this asymmetry. In the future, the human body might be just like a car — a well-oiled machine, still exposed to exogenous risks, accidents or the malfunctioning of some of its components. If that future is realized, the business model of health insurance will have to evolve in that direction too — and the role of governments as the primary providers of health insurance in many countries is likely to be put in question.
