<What Electronic Health Records Mean for the Future of Underwriting>
The steady transition to electronic health records is changing the industry as we know it—and its impact will be felt across the entire spectrum of underwriting.
In this episode, we talk with Doug Ingle, President of Doug Ingle Underwriting Research LLC, about how emerging data sources are changing the game and what the future holds for underwriters and carriers.
Join us as we discuss:
What underwriting transformation looks like
The benefits of digital health data
How EHRs can be used across the spectrum of underwriting
Change management strategies for underwriting innovation
How to incorporate data into automated underwriting
What Underwriting Transformation Looks Like
Underwriting transformation is evident within the three distinct formats of health records that underwriters have had to work with:
At first, it was all paper-based: mountains of files which required manual and individual analysis.
Pure paper-based records evolved into a mix of facsimile and PDF. Ultimately it was still a paper-based record being analysed.
Health data is evolving again, this time becoming purely electronic: collection, storage and transfer.
<“Electronic records and truly digitized attributes are the wave of the future of underwriting.” — Doug Ingle
The Benefits of Digital Health Data
Doug mentions several key benefits offered by EHRs:
The ability to conduct faster research and piece together the story of risk in more creative and effective ways
Paper-based historical data served little value unless someone was willing to spend hours, days or weeks going through it for useful information. With digitized health data (especially if it’s normalized), valuable data elements can be easily found and presented to enable modern underwriters to make decisions about risk.Operational enrichment for the average underwriter
EHRs unlock the capability for underwriters to also behave as analysts. Not only can they access historical data, they can also look for patterns and create taxonomies so that it becomes useful for the underwriting process—shorter lead times and more personalized and contextualized outputs.
Speed of access
Pre-EHR, a typical attending physician statement (APS) would take up to three months to arrive on an underwriter’s desk. EHRs cut that down to almost instantaneous access.Less friction
Customers can reduce or completely bypass laborious application steps, like full physicals and excessive blood tests. EHRs make this possible by making the right and most recent data accessible to both healthcare practitioners and underwriters.
How EHRs Function Across the Full Spectrum of Underwriting
In the context of underwriting, EHRs include richer data such as claims, applications, medical conditions and historical data around treatments.
Woven together, it creates enough context for underwriters to provide increasingly accurate and appropriate experiences to each customer.
The application itself contains valuable personal information which is used by the underwriter.
The assessment of each application is more of a cross-reference exercise than a data gathering exercise, since EHRs will either correspond, and enrich the application, or not.
EHRs enable scenario testing at different stages of the underwriting process. Customers presenting accurate information during the application stage affect the rank order change of other elements, like the medical examination, which can remove points of friction.
Similar to scenario testing, the cost-benefit analysis process is equally enriched by accessing EHRs with multiple variances.
EHRs can also inform updated and hyper-personalized customer pricing, since all the data required for risk profiles are available almost instantaneously. Retention teams are able to keep customers engaged.
EHRs enable accelerated underwriting: the delivery of a fully underwritten product within a fraction of the timeline it would take, using the traditional APS and other paper-based records.
EHRs offer vast amounts of information as early as possible in the process, enabling constantly shorter turnaround times with fewer points of friction for customers.
<“EHRs can be used all across the spectrum of underwriting and be a valuable factor for each of them.” — Doug Ingle
Change Management Strategies for Underwriting Innovation
Communication is critical in all change management situations.
Underwriters are aware that their volume of requirements influences their salary reviews. When working with EHRs for the first time, there’s natural uncertainty about how it affects those requirements.
Doug therefore encourages management teams to train underwriters on how to use new formats of information, and new data sources too. He also mentions the importance of involving underwriting auditors in the training and support processes and structures, to make sure that quality standards are consistent throughout the transition.
Feedback sessions are also critical, that allow for underwriters to ask questions and request support where necessary.
Incorporating Data into Automated Underwriting
The data patterns and taxonomies that underwriters start to extract from EHRs can inform rules engines.
In this way, underwriters can use rules to make decisions at scale and within seconds. By relying on data, underwriters can evolve their criteria and requirements lists in such a way that insurers create various split paths, new tiers for pricing, coverage, waiting periods and retention strategies.
If the majority of applicants can be served through automation, algorithms and rules-based processes, it leaves more capacity for underwriting talent and intelligence to be applied to outlying applicants and statistical anomalies.
<“The underwriter of the future will need and want to be the rules engine writer, they're going to want to be the data analyst, and they're going to want to be the person that can look at the data and scenario-test it.” — Doug Ingle>
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