Wilm Tennagel |

The role of the Private Healthcare Insurance

The pandemic, increasing complexity and digitalization: the role of the Private Healthcare Insurance in the German healthcare system of the future

"From payer to player" is one way to describe the changing role of private health insurers (PHI). In an increasingly complex system with a growing number of stakeholders, PHIs are often taking on the role of health partner. This was one of the conclusions of the study "The Role of PHI in the Healthcare System of the Future," for which we once again collaborated with the Leipzig insurance forums. The study shines a light on the political, socio-demographic, economic, and technological factors that will shape the German healthcare industry in the coming years. In this view, the relationship between clients (patients), providers (hospitals, doctors, pharmacies), and cost bearers (health insurance groups) continues to form the core of the healthcare system. However, the balance in the relationship between these three groups will change. Clients are increasingly gaining power in their interactions with the other two stakeholders and placing higher demands on them. The cost bearers must therefore take on a more active role in delivering healthcare and in the health activities of their members. At the same time, they must manage the effects of an aging society and the financial consequences of the coronavirus crisis on the contributions and benefits that form the basis of their services.

PHI remains a central pillar of the dual healthcare system

PHI is and remains a central pillar in Germany's dual healthcare system, with steadily increasing contributions and a stable financing cushion. For decades, it has served as competition to public health insurance within the German healthcare system. It supports and subsidizes medical progress, participating in pioneering developments in preventative care, medical treatments, and recovery processes, with a valued voice in political discourse. Measures for curbing the coronavirus pandemic – within Germany and abroad – were and continue to be drastic and massive for the population as well as the economy. Medical personnel and care staff in university clinics and hospitals as well as in residential and out-patient centers for the elderly and others have been hugely overloaded for months. Even so, Germany alone accounts for more than 70,000 deaths from the effects of the SARS-CoV-2 virus. The pandemic truly opened the world's eyes to the immense challenges that can befall a healthcare system in an instant.

The insured trust Germany's healthcare system

Among other things, our study reported the results of two comprehensive client surveys – one at the beginning of the pandemic and a follow-up questionnaire at the end of 2020. The results of the surveys attest to the trust that insurance policy holders have in the healthcare system: survey respondents in general expressed significant trust in the German healthcare system. The survey included questions about health insurance funds, doctors, clinics, pharmacies, medical technologies, and pharmaceutical companies and their products, as well as counseling, research, and education in this sector. In the first survey, in March 2020, only 20 percent of respondents said that they had no or very little confidence in the system, while 80 percent rated their trust in the German healthcare system as high or very high. Just eight percent of respondents reported very high trust in the system during the first survey period. 45 percent had mandatory or voluntary coverage through public health insurance, while 55 percent had private insurance.

Challenges in a complex healthcare system

Overall, in five to ten years, the healthcare system will comprise many more points of interactions between the individual stakeholders. Although this will increase the system's complexity, it will also lead to better care and increased transparency. PHI faces a market environment which is:

  • still heavily politically regulated,
  • characterized by low interest rates,
  • more heavily affected by the consequences of an aging society,
  • and includes many more healthcare stakeholders, both in the healthcare sector as well as from other areas.
  • This market environment must also respond to the financial impact of the coronavirus pandemic on contributions and benefits.
  • Meanwhile, the different stakeholders are more and more connected, thanks to their integration with the telematics infrastructure.
  • It drives medical innovation – with the support of technology – while significantly improving qualitative and quantitative care for its patients, something which has also been streamlined by the coronavirus pandemic.

PHI field of action

Based on these market conditions in the healthcare sector, the demands of the sector's end clients, as well as the effects on the PHI industry which we've identified, in this study we shine a light on the most important priority areas in the sector for preparing for future developments. In addition to constant development of product portfolios, with future-proof products that can quickly and flexibly adapt to a changing landscape in the fields of medicine and technology, possibly integrating complementary services from outside the insurance industry, and cooperating with all the stakeholders in the healthcare system, the focus should be on optimizing processes first and foremost.

Optimizing processes to boost potential for innovation

The highest priority should be on the digitalization and automation of processes, in order to keep up with competitors both within and outside the sector. The ability to identify and remove drop-off points, for example those triggered by missing customer information or lack of connection with the doctors, is an important factor for success in digitalization of these processes. In the areas of consultations, offers, and transactions, hybrid consulting models are the starting point for optimizing the sales process. The insurance agent can advise customers through a hybrid combination of video or office visits, and make the necessary documents and information available digitally. In the next phase of development, AI-supported bots help "hybrid agents" advise clients and create offers.

PHI as a driver of innovation

The study's expert surveys made one thing clear: PHI has potential, but it must first break new ground in order to exert a major influence on the German healthcare system. "When an established company has the will, there is a way. However, it must be prepared to break from decades of complacency, a secure business model, and reliable revenue and be willing to revert back to the building phase. The party is over. We must invest. We must be pioneers in this field, get our hands dirty, and spend money. A lot of people haven't gotten that message yet," says Dr. Paul Brandenburg, a doctor and publicist.

Read what other experts have to say, as well as in-depth analyses of digitalization as a factor for the success of PHI, and much more, in the study "The Role of PHI in the Healthcare System of the Future," available as a free download here.

Please note that the study is only available in German here.


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