Digital Insurance Agenda

The future of health financing: It’s time for private insurers, fintech and pharmas to forge new partnerships and create bold new solutions

Written by Fernando Arnaiz, Health Systems Strategy Leader Roche on Dec 18, 2020

Recently I explored “Why Innovative Funding Models play a significant role in helping healthcare systems impacted by COVID-19 “build back better”. I have witnessed first-hand the positive impact of some of these models. Here I start to share my experience and views, gained recently through my work with Roche, in a series of articles. The first on my list is private insurance and the positive role that partnerships between pharmaceutical companies and insurers can play now and in the future in improving people’s access to good healthcare.

Roche was the first pharma company globally to work with private insurance companies and now has a decade-long track record of collaboration with them as well as public stakeholders. When we started in China almost 10 years ago, not everyone saw the potential of pharma and insurance collaboration to develop and improve health insurance. Thankfully, today, the landscape looks very different and I feel optimistic about the possibilities and opportunities for more initiatives in the future.

Embracing cross-sector working
There is much more clarity around the need for cross sector collaborations in areas such as Public-Private partnerships and acceptance that private insurance (PI) has a role to play in advancing sustainable financing.
I am also very excited about the new avenues for partnering that are arising, for example, the opportunities presented by combining technology and finance – known as FinTech (Financial Technologies) – that seeks to improve and automate the delivery and use of financial services.

Enabling sustainable financing remains a priority
Recognizing that population health is a public good, at @Roche we believe that increasing national health financing is crucial, both to ensure the sustainability of health systems and to protect patients from catastrophic financial burdens. The pandemic has served to emphasise the importance of this. Ensuring long-term government commitment is paramount to increased public healthcare investment and promotion of functional healthcare systems with adequate risk-pooling mechanisms that ultimately enable better service coverage and increased efficiency in resource allocation. 

Yet, at Roche we acknowledge that, in order to provide access and financial protection for those affected by non-communicable diseases (NCDs), the strengthening of healthcare systems and elimination of inefficiencies might not be sufficient. That is why looking at innovative funding models becomes key to address the healthcare funding shortfall to adopt innovative health technologies.

Private insurance and its relevance in healthcare ecosystems
The private insurance sector is growing in almost all regions; this is fueled by a powerful combination of trends:

  1. An aging population and income growth are increasing healthcare consumption: The global population of people aged 65 or older is likely to almost double from 2010 to 2030. The proportion of the global population with middle-class incomes (26.5% in 2009) is expected to rise to 58.8% by 2030 (This is especially strong in the Asia–Pacific region) (1)
  2. Healthcare consumption is further increasing because the global disease burden continues to rise
  3. Pressure on public finances is prompting many governments to impose healthcare spending cuts or seek out private payors as intermediaries to better manage spending and outcomes.

Over the years, we have maintained that private health insurance is a sustainable funding model and it is a second best option after public funding. As it was observed in the “Private health insurance: history, politics and performance, EOHS&P (2020) (2) that private health insurance can work well alongside public funding to ensure affordable access for a broader population, in particular in low- and middle-income countries (LMICs) that have mixed (public and private) health systems. If it is well regulated and monitored with care, private insurance can help economies to ensure an affordable system, increase financial protection (by reducing exposure to out-of-pocket payments), expand quality access to health services, and accelerate the adoption of innovative care technologies. In poorer countries, private health insurance can play a transitional role, helping to boost pre-paid revenue and paving the way for public insurance institutions.

How Roche helps insurers embrace innovation
Roche’s collaborations with insurers do not exclusively target a Roche product (just as we do not work with only one insurer), rather we focus on a disease area (e.g. Breast Cancer) or a technology (e.g. Comprehensive Genomic profiling). Each case depends largely on local context and insurer needs.

Within the last few years, we have gained experience and knowledge on how to work together with insurers.  We understand their desire to maintain current premium levels and manage healthcare costs and even to differentiate themselves by offering insurance coverage for new innovation. We can now tailor our support depending on their needs in key areas such as:

  • Access to Roche scientific expertise (epidemiology and treatment cost data, patient flows to design products)
  • Training & education on innovative treatments for sales force, health agents and/or corporates, awareness campaigns and patient materials
  • Efficient patient management through collaboration with providers & other stakeholders, guidance on treatment adherence, protocols, and different actions to accelerate the development of partnerships with governments.
     

New disruptive models and new avenues for Roche innovation with insurers

  1. Precision oncology/personalized healthcare: Insurers have a huge opportunity to develop insurance solutions for precision oncology, where molecularly guided treatment options have the potential to bring better patient outcomes while using resources more efficiently. We are helping (re)insurers embrace personalised healthcare with in-depth insights to understand patients’ tumor profiles, identify targeted treatments and the costs along their journey.
  2. New therapeutic areas: There are new therapies available with tremendous positive impact on patient outcomes such as in spinal muscular atrophy in the space of rare disease or Duchenne in Gene Therapies. Insurance can create new products to provide comprehensive access to these innovative technologies. Together we are currently exploring different payment models to ensure access.
  3. Diabetes and disease management programs
  4. New distribution channels & partners: More and more we are seeing new opportunities for collaboration between governments, pharma and private insurance companies. For example, to supplement the basic medical insurance package. In addition, many countries are leveraging new platforms to address and solve funding challenges such as FinTech (Financial Technologies).
     

FinTech & Insurtech may revolutionise health funding and financing
Every patient journey is accompanied by a financial journey. Evolving developments in savings, lending and payments platforms have the potential to transform healthcare across the world, by revolutionizing and scaling health funding and financing mechanisms for public and private payers while improving the patient’s financial journey. FinTech has made financial services more inclusive, accessible and affordable by reaching millions of previously underserved populations such as the unbanked, rural or informal sector.

In the short and mid-term FinTech can bring substantial impacts in healthcare space in the following ways:

  • Expanding the health-financing base: Improving connectivity among digital users can strengthen health system resource pooling capabilities and enable risk transferals among groups.
  • Increasing financial protection – Inclusive digital finance mechanisms can help reduce individual OOP throughout the patient financial journey.
  • Supporting data-driven environments: Meaningful data generation will continue to tailor health products and services to patient needs and monitor for improvements.
     

Roche has joined this health financing revolution
As I shared during the recent DIA conference, Roche is now collaborating with Fintech, online, digital insurance companies, healthcare providers and civil society to accelerate the design and launch of promising digital mutual aid schemes and crowdfunding platforms as well as Insurtech models that can address financial shortfalls present in many health systems. We have sponsored the creation of a number of pilots in different countries such as Pakistan, the Philippines and China of course. Findings from these initiatives will reinforce future developments as we continue to pilot and learn while creating access to innovation for patients.

The pandemic has ravaged economies the world over, so if we are going to stand a chance of “building back better” and supporting healthcare systems to deliver the best care now and in the future, there has never been a better time to work in partnership to embrace and put innovative financing solutions into practice.


Fernando Arnaiz

Further reading:
Global private payors, McKinsey
Private health insurance: history, politics and performance, European observatory

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