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Employee Benefits: The Disruptors Have Arrived – Part III (kind of...)
Feb 27th, 2019
Back in July of 2017 I wrote 2 blogs (Part I HERE) (Part II HERE) on disruption in the Employee Benefits space. Both had pretty good consumption with lots of likes and views. So presumably the topic was a good one at the time. I had great intentions of at least 3 more blogs in that series.
As they say – good intentions unintentionally pave the way to some undesirable places. I never did finish the series.
I took a break from writing regular blog posts in 2018 for a variety of reasons but am committed to a return to generating some quality content here in 2019.
Today I was looking back on some of my old posts, which is how I came across the unfinished series on disruption. In reading through these posts, now approaching 2 years old, three things quickly struck me:
1) The 3 disruptors I identified but did not elaborate on continue to be on the verge of changing the way Employee Benefits are built, marketed, implemented, managed.
2) There are more tangible examples of each of these distruptors now versus 2017....
3) Not much has changed.
In an industry that innovates at a glacial pace and with technology driving massive changes elsewhere, we seem to be cautiously (reluctantly?) poking around the edges of adopting anything close to impactful. One of the major factors impeding progress is the simple yet powerful fact that the current business model is still sort of working.
So really, what’s the rush to innovate and change?
None really. However, as I mentioned in my original posts on this topic – quite often industry leaders won’t be the ones driving change. Instead, the focus on incremental (smaller) change and continuous improvement impedes leaps of faith. It will take an outsider (or maybe a desperate and/or bold insider) to push the envelope.
As a refresher and a reboot of that blog series – here are the 3 disruptors I identified and a quick take on each, which I will expand upon in the coming weeks.
Disruptor #1: Data
There are few industries on the planet that have not been impacted by an explosion in data collection and analytics. We know more, about more, than ever before. There is power in interpreting the things we do, when we do them, who we do them with, where we do them, how often we do them etc. Past behavior is a great predictor of future actions. The Employee Benefits world is chock full of data but we don’t do a great job of using it to predict anything. Underwriters may lay claim to sophisticated predictive pricing models – but I’d vehemently disagree. Those models are really designed to protect insurers in a very conservative way, which is ok – but in no way drives any form of innovation. I’d suggest they do the opposite and are actually holding us back. There are almost an endless number of really, really obvious opportunities here for data aggregators and analysts with a focus on improving outcomes, adherence, health and wellness, engagement and productivity. Financial outcomes and pricing models will be by-products and beneficiaries rather than drivers.
Disruptor #2: Artificial Intelligence
Back in 2017 AI was definitely a topic of discussion, but today it’s pervasive and comes with a whole host of positive and negative connotations. AI as an innovator is really just an extension of the impact of data collection and analysis. It’s taking all of the POSSIBLE data (note here possible means more than just the obvious stuff) and developing predictive, powerful, scalable models. AI can be crazy powerful and scary all at the same time, thus the reluctance I think for adoption. On that point I think caution is actually advisable simply because we don’t know what we don’t know. Putting all eggs into the AI basket without fully understanding the implications is a recipe for disaster. That being said, AI can have some very massive impacts in the Employee Benefits world mainly due to the availability of multiple data sources. I can see a role for AI to have a tremendous health and wellness impact providing detailed and personalized recommendations based on benefits plan utilization combined with data from other sources (obvious sources like personal tracking devices but also less obvious sources like public health data).
Disruptor #3: Personalized Health
To me this one is a no-brainer and a topic I’ve been hammering on for many, many years. As someone who has found athletic pursuits (i.e. running, triathlons, obstacle course racing) and therefore training much later in life (read: I was not an athlete as a kid) I’m fascinated by tinkering with data related to training, nutrition, performance etc. All stuff that helps me better understand my own health, fitness and performance. It can dramatically change engagement and outcomes. The tobacco industry used to state that confusion was their ally – referring to the fact that the more they could muddy the waters on the impact of smoking the better. They didn’t have to refute the growing body of research on the negative effects of smoking, just sow enough seeds of doubt that the consumer would carry on as is (similar things are happening in the processed food industry today by the way). The opposite can hold true for health and wellness, and by extension Employee Benefits. By eliminating generalities and ambiguity, personalized health information (data) and what that means to the individual (maybe AI) can drive significant engagement and action. Instead of preaching to the masses personalized health tailors the message and actions to an audience of one – you. As I’ve said before – this is the Employee Benefits version of mass customization.
What fascinates me most now, in looking back at this stream of thought – is the interconnectedness of all 3 disruptors. There is an interplay here that is incredible, powerful and game-changing. If only….
I’ll aim to expand on each of the disruptors in coming blog posts. There should be enough content here to fill up all of 2019 – so no excuse for me to rest on my laurels. The status quo is no longer acceptable!
Given the philosophical versus technical nature of these topics – I’d love to hear from others – other advisors, health care specialists, HR professionals, employers, insurers etc. Give me your feedback, your opinion. Have I missed something? Am I off base? Have a take and let’s have some dialogue. Dialogue diverse in nature generates new ideas and challenges the status quo. Let’s go!