preface
In February 2022, Hainan Province issued the 14th Five-Year Plan for the Development of Digital Health, mentioning that in order to meet the treatment and health management needs of residents for chronic diseases and other diseases, "digital therapeutics" will be written into provincial plans.
This is the first time that digital therapeutics have been included in a provincial plan. With the gradual clarity of policies, the digital therapeutics industry has also ushered in a boom in development.
According to Grand View Research, the mainland digital therapeutics market was valued at approximately $300 million in 2021 and is expected to reach $1.5 billion by 2025, growing at a CAGR of 56%.
The broad prospects of digital therapeutics in the field of chronic diseases in the elderly have also promoted the innovative exploration of the business model of "digital therapeutics + insurance products".
Commercial insurance and digital therapeutics are a natural fit.
Digital therapeutics can realize large-scale early diagnosis and early screening of diseases, assist patients in self-health management, and help insurance companies achieve the purpose of cost control. AgeClub has noticed that many insurance companies in mainland China have begun to enter the geriatric chronic disease industry, trying the organic integration of digital therapy and insurance products.
In this context, how to create an efficient business model has become the focus of practitioners in this emerging field.
To this end, in this article, AgeClub will introduce the innovative cases of digital therapy and commercial insurance combination model in the popular field of cognitive impairment in the elderly, and try to explore the best entry path in related fields.
Sompo Holdings is a multinational insurance company that ranks among the top three insurance companies in Japan and is one of the top 500 companies in the world. The business provides property, casualty, life insurance, and financial and other services to customers at home and abroad.
In early 2020, it partnered with Neurotrack, a California-based startup dedicated to finding digital treatments for Alzheimer's, to launch "dementia insurance" for cognitive impairment in the elderly.
Source: Sompo's official website
The launch of the insurance not only provided millions of people in Japan with the tools to assess and manage cognitive health, but also enabled Sompo to successfully transition from "managed care" to "preventive care", completing a major change in its business model.
This article will deeply analyze the establishment and business model of this dementia insurance, hoping to provide some inspiration for the development of "digital therapy + insurance products" in the elderly industry in the mainland.
PART 01
Focus on Alzheimer's symptoms,
Vertical layout of the elderly industry
As Japan continues to age, the number of elderly people over 65 years old with dementia is increasing year by year.
In 2018, the number of people living with dementia exceeded 5 million. In 2025, about 1 in 5 older adults are expected to have dementia. Mild cognitive impairment (MCI) is more likely, with data suggesting that nearly 5-15% of people may develop MCI each year.
Source: Sompo's official website
But the challenges posed by aging to the physical health of the silver-haired group are not all negative.
From another point of view, for chronic diseases such as dementia that require long-term medication and care, if we can provide efficient and intimate care services for elderly patients in a targeted manner, we can cultivate their habits of use, thereby bringing more profit growth space to enterprises.
Therefore, Sompo is actively focusing on the opportunities presented by this change and trying to develop a system of dementia prevention products that can effectively delay the onset of the disease.
In 2015, dementia became one of the important social issues that the Sompo Group is committed to addressing; In 2017, an agreement was signed with the National Longevity Science Research Institute in Japan to conduct research on the practical application of dementia symptoms; In 2019, he reached a consulting service relationship with Professor Miia, an authoritative expert in the field of cognitive ability of the elderly.
After more than 5 years of practice and research, Sompo realized that combining digital therapeutics for geriatric cognitive intervention with its own insurance products for integration and innovation would have great advantages in the market.
First of all, as a new treatment concept, digital therapeutics has certain risks in the rigorous medical industry.
In the mainland, digital therapeutics products need to be approved by the State Medical Products Administration. In terms of declaration, digital therapeutics products are divided into two or three categories, and depending on the type, companies also need to ensure that the products meet the corresponding cybersecurity capability requirements.
The core function of an insurance company is to assess and price the risk, and finally get to the bottom line. The combination of digital therapeutics and insurance products can provide some risk protection for this emerging format.
Secondly, digital therapeutics can provide new ideas and solutions for the development of medical insurance, make up for the service shortcomings of insurance, provide customers with deeper services, and ultimately promote the establishment of a new commercial insurance system.
As for the reason why Sompo chose to enter the vertical track of brain function in the elderly, it is inseparable from the development status of digital therapy.
Nowadays, digital therapy companies are mainly concentrated in the field of chronic disease treatment, which is also the most competitive track for digital therapy companies at home and abroad, and the technology is relatively mature, and there are chronic disease management, follow-up systems, Internet diagnosis and treatment platforms, mobile medical hardware and other product formats.
Therefore, cooperation with digital therapy companies in the field of aging can provide customers with personalized health management services with long-term tracking, prediction and early warning, and improve customer experience and satisfaction. In addition, the insurance business model can be reconstructed through the creation of dynamic risk assessment models.
PART 02
Introduction of health management,
The first geriatric dementia insurance product
Sompo and Neurotrack launched dementia insurance, which is Japan's first medical insurance for elderly MCI and Alzheimer's patients.
In the product system, Neurotrack provides disease risk assessment, timely intervention and health management for the insured population at the prevention end, while Sompo plays the role of the bottom line at the beginning of the disease, giving the sick elderly the medical expenses promised when they apply for insurance, reducing the family's economic expenses and the burden of caregivers.
1. Insurance Coverage
After enrollment, the insurance is valid for the insured for life, but the elderly customer is not eligible for refunds while the insurance is in progress.
The coverage content of dementia insurance is divided into two parts: mandatory and optional, the former will be covered as long as the insurance is insured, and the latter is whether to accept it by the elderly customer.
There are three types of basic protection:
- Dementia benefits:
When you are diagnosed with mild cognitive impairment (MCI) for the first time, you will receive an insurance premium of 50,000 yen; If you are diagnosed with dementia for the first time, you will receive an insurance benefit of 1 million yen. If you are diagnosed with cognitive impairment after having MCI, you will receive 950,000 yen insurance for the second diagnosis.
- Fracture treatment benefits:
If an elderly person is diagnosed with a fracture, he or she will receive an insurance premium of 50,000 yen each time, up to 10 times in total. Fractures are broad and also include fissure fractures and fatigue fractures.
- Accidental Death Benefits:
If an elderly person dies due to an unforeseen accident or a special infectious disease, he will receive a disaster death compensation of 500,000 yen.
In addition, dementia insurance products have designed three optional programs related to aged care and illness:
- Respite Care Payment:
Those who purchase this value-added service can receive insurance benefits in one of the following three situations: according to the provisions of Japan's public nursing care insurance system, it is a first-class nursing care matter;
For elderly clients under the age of 65, who need assistance in carrying out daily life (i.e. cannot walk, dress, bathe, eat, etc. on their own) for more than 180 days; Or reach a high state of inability to take care of yourself. Temporary care benefits can only be received once, and the amount is chosen by the elderly at the time of application.
- Lifelong Care Payment:
Similar to respite care, the payment of this insurance premium has three similar prerequisites: according to the provisions of the Japanese public nursing care insurance system, it is a third-level nursing care matter; For elderly clients under the age of 65, who need assistance in carrying out daily life (i.e. cannot walk, dress, bathe, eat, etc. on their own) for more than 180 days;
Or reach a high state of inability to take care of yourself. However, unlike respite care, if one of the above occurs, elderly customers will receive a selected amount of nursing care for each subsequent year.
- Specific Sickness Insurance Benefits Waiver:
This is a special insurance policy. If the elderly choose this service, they can no longer pay premiums in the future if they suffer from conditions such as cancer, acute myocardial infarction and stroke, but still enjoy all the previous insurance services.
Source: Sompo's official website
It can be seen that Sompo attaches great importance to the design of insurance content.
On the one hand, Sompo grasps the living habits and health characteristics of elderly service recipients and pays attention to details.
Taking the "fracture treatment insurance money" as an example, for the elderly, it is said that the bones have been overbearing the impact force for a long time, the muscles continue to be overstrained, and the nutritional supplement is not timely and other problems can easily lead to the occurrence of fatigue fractures.
Therefore, the insurance clause adopts a broad interpretation of fractures, which is more in line with the actual situation of the elderly.
Sompo, on the other hand, innovates its service model, combining personalized and formatted insurance products.
The three mandatory products are the basic needs of the elderly to apply for dementia insurance, and the three optional products are selected by customers as value-added services.
In terms of optional items, Sompo introduced a "lifetime care payment" similar to long-term care insurance to increase the purchasing power of optional purposes. Long-term care insurance is an important source of profit for the Sompo Group, with consolidated sales of 138.618 billion yen as of March 2021.
The combination of "mandatory + optional" not only facilitates the signing of contracts by insurance companies, improves sales efficiency, but also realizes the customization and accuracy of insurance products to a certain extent.
2. Conditions for Participation
In order to achieve risk control, Sompo has the following requirements for the age and health status of the elderly who insure this product:
- Age not more than 80 years old;
- have not been diagnosed with dementia or mild dementia;
- To date, I have not received nursing care services under Japan's public nursing care insurance system;
- In the past 2 years, he has not suffered from acute myocardial infarction, neurotic Parkinson's disease, depression, schizophrenia, panic disorder, etc., and has not been hospitalized or undergone surgery due to illness or injury.
The above insurance conditions are not strict, most of the elderly can meet, but also to a certain extent to screen out the high-risk groups who are likely to suffer from cognitive impairment after applying for insurance, and control the expenditure of insurance premiums in advance.
3. Insurance costs
Sompo's official website offers premium simulators for elderly users.
First, users need to enter their age and gender. Different ages and genders have an impact on premiums. In the case of dementia insurance, older people and women have higher premiums.
Source: Sompo's official website
Secondly, it is the amount of the mandatory purpose to determine. For example, if you choose 50,000 yen as the insurance premium for fracture treatment, if an elderly person is diagnosed with a fracture during the insurance period, he will receive the compensation of 50,000 yen selected at the time of signing the contract.
Source: Sompo's official website
Finally, the customer can also decide whether to enroll in the optional program and the amount of the project.
Source: Sompo's official website
If calculated according to the most basic services and the minimum amount, the insurance amount that a 60-year-old man needs to pay is 2070 yen (about 102 yuan) per month; If you enroll in all items and the maximum amount, the premium is 23130 yen (about 1136 yuan) per month, which is 10 times the former.
It can be seen that different project choices and amount determination, the difference between premiums is very large. Through these variables, the product can meet the needs of customers with various economic conditions and different health expectations.
In addition, the setting of the premium simulation system can also make the premium calculation more convenient and transparent, and elderly users can self-assess the premium amount on the computer, improving the work efficiency of insurance sales staff.
4. Insurance Contracting
In order to protect the rights and interests of the elderly, SOMPO has also established two special insurance contracting systems.
The first is the cooling-off period system. Within the specified time, the insured can apply to cancel the insurance contract. Depending on the situation, the period is generally within 15 days from the application date or premium payment date.
The second is the method of signing. With regard to this insurance, Sompo only accepts a signed form in person and cannot be purchased online. The company will arrange staff nearby to provide door-to-door signing business for the elderly.
The reason for these two special systems is that modern insurance, as an important part of financial services, has more professional and risky products than general commodities, and with the continuous development of the economy, the content of new insurance is more complex.
The introduction of the cooling-off period system and the restriction of interview methods are further guarantees for the fair trading rights of elderly consumers. Moreover, from the perspective of enterprises, these systems can improve the overall evaluation of the company in the consumer market, create the image characteristics of the company caring for the elderly, and be conducive to the long-term development of the company.
PART 03
From management to prevention,
Digitalization drives model innovation
From the perspective of insurance content alone, dementia insurance does not seem to be significantly different from other insurance products in the purchase process.
But its special feature is that in the provision of insurance services, Sompo and Neurotrack have established a good cooperative relationship.
From early screening to intervention, the two companies have jointly created a one-stop closed-loop solution for the whole life cycle, which not only greatly reduces the risk of illness of policyholders, but also reduces the company's compensation possibility, and also fills the market gap of "digital therapy + insurance products", which is a successful commercial landing of insurance products in the elderly industry.
Source: Neurotrack official website
1. Innovation in "preventive medicine"
Managed health insurance originated in the United States in the 6O era of the last century, and is a medical insurance model that integrates medical service provision and operation and management.
Under the traditional medical insurance model, the insurance company as the underwriter is in a third-party position, and after the customer receives medical services, the corresponding medical expenses are reimbursed to them, which will inevitably lead to uncontrollable medical expenses.
Managed health insurance, on the other hand, combines medical services with insurance funds, and insurance companies and medical providers become a community of interests, and when the insured falls ill, they will go to the hospital with which the insurance company has a contractual relationship for treatment.
The managed health insurance model shifts cost control from the back-end to the front-end, turning passive into proactive, which can effectively control risks and reduce costs.
But managed care also has some drawbacks. For example, the number of medical institutions that provide services to the insured is limited, the insured cannot choose by himself, and the experience and quality of medical treatment cannot be guaranteed; Some products also limit the number of times an insured person can visit a medical facility for a check-up each year.
Based on these two models, Sompo creatively created a "preventive medicine" model by combining insurance products with health management.
By increasing the prevention and management of dementia between insurance and benefits, Sompo controls the risk from the perspective of reducing the chance of illness.
This model reduces costs without restricting the medical options of elderly users, who can use the insurance money obtained to go to any medical institution for treatment in the event of illness.
What Sompo has done is work with Neurotrack to minimize the risk of illness for its customers. This can not only promote the health of the elderly, but also reduce the possibility of their own compensation, and achieve the company's profit growth while winning customer reputation.
2. Digital empowerment and dementia prevention
Founded in 2012 and headquartered in Silicon Valley, California, Neurotrack is an American developer of AI memory detection systems. So far, 15 rounds of financing have been conducted, raising a total of $59.25 million.
Source: Neurotrack official website
In 2016, the company launched a product called Neurotrack Imprint, which uses eye tracking technology to identify the extent of damage to the hippocampus in the human brain, which can detect earlier whether patients are at risk of cognitive decline. Neurotrack has also conducted clinical studies in the United States to prove the science and effectiveness of its products.
On the basis of this product, Neurotrack has further established a digital prevention platform for dementia. Once a risk is identified, Neurotrack provides users with personalized recommendations on diet, exercise, sleep, stress management, and cognitive training to improve their specific lifestyle and reduce the risk of dementia.
From early detection of cognitive dysfunction to targeted improvements in brain health, it can all be achieved through a mobile app. Seniors can get solutions anytime, anywhere using their smartphones.
Source: Neurotrack official website
Specifically, Neurotrack provides the following services during the prevention phase for elderly customers who purchase insurance products:
- Cognitive Health Assessment:
- Using eye tracking technology, by completing a series of assessments in the app, older adults can understand whether they are at potential risk of cognitive impairment.
- Personalized advice provides:
- According to the test results, personalized advice is provided to elderly customers in diet, exercise, sleep, relaxation, etc., and their cognitive decline is slowed down through lifestyle changes.
- Daily life changes:
- Older users make adjustments to all aspects of their daily lives based on the recommendations made by the app to improve their cognitive status.
- Regular feedback adjustments:
- Neurotrack will regularly re-evaluate the user's health status, feedback the evaluation results, and adjust the improvement plan given to the user in time if necessary.
Managed care in the United States has always been learned and respected by the insurance industry. The partnership between Sompo and Neurotrack combines digital therapeutics with commercial insurance, transitioning from "managed care" to "preventive care."
For insurance companies, the intervention of digital therapeutics reduces the probability of payouts. The reduction of insurance companies' compensation is actually equivalent to insurance companies having revenue, and the sharing of revenue is also a viable business model for digital therapy companies.
More importantly, preventive medicine pays more attention to the health of customers, shifting the focus from compensation after illness to prevention without illness, and elderly consumers are willing to pay for such cross-border and integration.
epilogue
At present, more and more insurance companies are beginning to focus on the combination of technology and services to introduce digital therapeutics into health insurance products.
Jiang Chongguang, deputy secretary-general of the Insurance Society of China, believes that "digital therapeutics may become the future solution of sub-health, chronic disease management and related insurance, and become an important starting point for non-standard commercial insurance." ”
From disease treatment to health management, the era of patient-centricity has arrived.
The transformation from managed care to preventive care can not only achieve accurate and effective management of people with chronic diseases and reduce the risk of compensation, but also create a dynamic risk assessment model for users, expand insurance policy coverage, and reconstruct the business model of insurance products.
It is foreseeable that the innovative development of digital therapeutics and commercial insurance will have more room for imagination in the future.
-END-