We’re living in the age of big data. Thanks to technology, we can now aggregate, and analyze, information on an unprecedented scale to help us make smarter decisions. We’ve seen technology create better baseball teams, pick which products we may want to buy online, even help President Barack Obama win re-election. So many decisions we make today are aided by computers making millions of calculations to help us decide the best path of action.
Why, then, has so little changed in how we make our health insurance decisions? We’re doing all the work. Our employee-sponsored health insurance is one of the most important decisions we make every year, so why are we still making this choice without relying on new technology and the terabytes of data private companies and the government have collected on how we consume health care? It’s time for benefits to meet big data.
Using technology guided decision-making allows each of us to select from a greater number of insurance options, both within and between product types. Why do employers offer employees only a few different medical plans? Certainly that can’t really meet the needs of a diverse company, can it? The assumption is many people couldn’t handle any more options. It would be completely overwhelming to not only understand the differences between plans, but also to analyze which plan would work best for us based on our unique needs.
Now imagine what happens when we throw in new benefits like dental, vision or critical illness. It would be a tsunami of information. Would we even know what’s best for us? But sophisticated algorithms can factor in decades of health care utilization and cost data to help us make better decisions, while still allowing us to choose insurance products based on our health needs, financial situation and personality.
Technology guided decision-making in the insurance space goes beyond just the individual. Our insurance industry, as now structured, is untenable. Costs continue to rise because of inherent inefficiencies in the market. People are purchasing insurance that doesn’t meet their needs — either overpaying and subsidizing others or selecting too little coverage and paying too much out-of-pocket, sometimes to the point of financial insolvency.
But using the power of big data, we can find the right plans for each of us. Premium increases slow as the market becomes more efficient. People become better consumers of health care. Since they chose the benefits, they are more apt to know what each benefit covers and how to use them to protect themselves financially.
It’s not a fantasy — we see it every day at Liazon. In our private exchange, our guided shopping experience builds a recommendation for each individual based on their unique needs and health care utilization and cost data. A recent study of our clients revealed that:
- Employees love choice — Only 10% thought there were too many choices in the exchange and only 24% thought choosing their plans was a difficult process.
- Employees like shopping for benefits online — 75% were satisfied with the process and 71% liked the ease of using the exchange.
- Employees see the value of decision support — only 16% of those surveyed felt the exchange’s decision support technology was not valuable
- Employees are better consumers of health care — 63% of users are more aware of the cost of medical care, and 60% say they are more engaged in their health care decision-making.
As our experience indicates, incorporating technology enables consumers to make better, smarter decisions about their benefits. Armed with this technology, they actually embrace the world of broader choice, and navigate it effectively.
Cohen is co-founder and chief strategy officer of Liazon.
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