I ran a poll recently on which emerging trend would have the biggest impact on healthcare actuaries in the future and (not to pat myself on the back) was excited to see that, out of 94 total votes, three of the options were nearly in a dead heat.
The four choices – advancements in medical technology, demographic shift, an aging population, evolving healthcare policies, or increasing preventative care – finished with 30%, 29%, 34%, and 7% of the vote, respectively.
This got me thinking, this is worth a deeper dive! So, how will these four trends impact the industry moving forward? Let me explain:
Advancements in Medical Technology:
I’m hesitant to use the cliché “revolutionizing the industry” when describing the impact technology is having on healthcare, but it’s difficult to explain it any other way. Breakthroughs in areas such as genomics, artificial intelligence, telemedicine, and wearable devices are transforming patient care and data collection which, for healthcare actuaries, means implications for risk assessment, pricing models, and predicting healthcare costs.
Analyzing the potential effects of new treatments, medical devices, and personalized medicine on insurance claims and mortality rates will become more critical to pricing and risk management – as is the ability to understand the new data and ultimately leverage it correctly.
Demographic Shift and Aging Population:
This isn’t a “chicken or egg” situation – advancements in medical technology are leading (and will continue to lead) to an aging population that’s living longer than the previous generation. The result of that is pretty simple: increased demand for healthcare services and long-term care.
Understanding the trend when projecting future healthcare costs and evaluating the financial stability of insurance plans and retirement benefits will only grow as an important function for actuaries. Analyzing demographic data, mortality rates, disease prevalence, and utilization patterns as well as the impact of aging on chronic conditions are all factors that will need to play into an adapting model.
Evolving Healthcare Policies:
This isn’t a new one for healthcare actuaries but funny enough it received the most votes in my poll. And if a poll were run 20 years ago, or 20 years in the future, it’s a safe bet that it would be the leading vote-getter at either of those points in time as well.
All I’ll say is we work in an industry of constant evolution and education and adaptation will continue to be key. Clients will look to us to monitor changes in legislation and understand the corresponding implications.
Increasing Preventative Care:
There’s a growing emphasis on preventive care like wellness programs, screenings, and early intervention which will likely have at least some impact on overall population health. Assessing the effectiveness of these measures through the evolving data should factor into risk assessment models and correspondingly, the pricing strategies for insurance companies.
