Artificial Intelligence Expedites the Future of Health Insurance

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By Alex Zakrivaševič, News analyst
Published on Nov 8, 2022

Insurance
Digital Transformation
6 min read

Today’s customer is completely different from the one five years ago, mostly because of the coronavirus outbreak. Locked in their apartment with devices as the only means of communication with the outside world, people finally and irrevocably went digital. Another thing that underwent significant transformations is people’s attitude to their health and the health of their loved ones.

These two elements boosted the health insurance market growth and emergence of various healthcare industry solutions. Referring to Global Market Insights, the Health Insurance Market size exceeded USD 2.8 trillion in 2020 and is anticipated to grow at a CAGR of over 4.6% between 2021 and 2027. The demand for insurance services is combined with a hundred times increased expectations from the insurance companies. Present-day customers look for a streamlined and clear-cut insurance process that can’t be established without technology at its core: starting from guidance in choosing the most suitable insurance plan, and ending with regular feedback on claim status.

Artificial Intelligence in the core of health insurance

New realities and high competition prejudged the development course for the health insurance industry for the following years or even decades. High load on the healthcare system and related branches uncovered weak spots requiring patching. Focusing on technology implementation allowed insurance carriers to break new ground and provide an exceptional experience to their customers. Easier data collection, business processes automation, improved risk management, etc. transform the health insurance industry from conservative into technology-based sector.

Prompt claim management is half the battle

Do you have a clue how much time and effort the insurer spends to process a single insurance claim? Before approval or rejection, a handler analyzes the policies, piles of medical documents and reports, and checks bank receipts. Hardly all of them are typed in full. Some of them are, some are just templates with hand-written details, and some are photocopies. Equipped with a magnifier and having mobilized all of his/her patience, the handler burns the midnight oil to decrypt the information and provide feedback to a customer regarding the claim as soon as possible. The entire process may take weeks or even months in especially complex cases, while a client that needs medical assistance has to wait. But what if there is not one claim a handler processes? If there are five or ten that need to be analyzed?

Besides claims processing, there is a strong necessity for handlers to interact with customers. Help to select a proper insurance plan, guide through insurance enrollment, provide prompt feedback regarding the claim processing progress, etc. all these actions take time and effort from the handler’s side. Otherwise, you’re in for the dissatisfied client, who’s not in the best emotional state because of the disputes with the insurance company in addition to the emerging health problems he/she filled in an insurance claim for.   

Artificial Intelligence is not a magic wand for immediate claim processing, but it is a great asset to speed it up. For example, with Optical Character Recognition (OCR)  powered by machine learning technology in your insurance software, a handler will not have to decrypt every hand-written line, wasting lots of time and risking getting something wrong. The technology extracts the information and analyzes any kind of text, be it a typed text or illegible doctor's handwriting. In case there is a typo or the text is hard to read, AI detects the errors and suggests replacement options the handler can choose from.

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Meet Present-day Customer’s Expectations with AI

How many times have you been on hold with your insurance carrier, listening to a robotic voice asking you typical questions you had to answer to be connected with a human operator? After the quiz, when you finally reach out, another round of a Q&A game begins, with the operator at this time, after which you find out that you are talking to the wrong specialist and need to call again because he/she can not transfer the call. Is it an experience you would like to have? We bet you’d not, and believe that your customers either. 

Implementation of AI in your custom insurance application will save time for your operators and nerve cells for your customers by enhancing the call routing process. Recognizing the context of the client’s request, and processing the data, the AI-powered software transfers the call directly to the right operator. 

Complex insurance policies, confusing terms and conditions, unclear payment terms exactly is not what present-day customers want to deal with. Each client expects an individual approach and wishes to be guided from A to Z to select the optimal option. In addition, not all inquiries are specific, and an operator has to answer typical questions that can be found in a FAQ section on a website. As a result, the insurance company employee puts more essential tasks on hold and deals with the ones with less priority. The number of people who are most likely to call when seeking healthcare or shopping for insurance keeps growing, and you’d better meet this demand armed to the teeth with modern tech. And the stats confirm it:

2021/22 Stats by industry on user preferences to use call centers

A data-rich chatbot will come to the rescue and reduce the workload of your call center. Integrated with your knowledge base, a chatbot can easily interact with customers, providing detailed information about insurance policies, programs, prices, etc. Among its capabilities are: 

  • Answer most frequent questions and inquiries, ensuring customer engagement
  • Scale customer service and optimize your employees` workload
  • Provide personalized recommendations on the insurance programs based on the data entered by the customer. 
  • Generate immediate personalized data-based quotes 
  • Accelerate average handling time 
  • Prevent fraud
  • Update personal customer profile and payment details
  • Gather feedback from policyholders

Utilize AI capabilities for fraud detection 

Approximately 4 billion health insurance claims are processed in the United States every year. According to the Insurance Information Institute, an estimated 3 to 10% of total healthcare expenditure amounts to fraud. The statistics could have been even more impressive if companies didn’t adopt tech tricks to detect fraud timely. The example of Highmark Inc.’s Financial Investigations and Provider Review (FIPR) department showcased the efficiency of Artificial Intelligence. In their case technology implementation resulted in 260 million USD of savings associated with the fraud. 

Artificial Intelligence is an indispensable assistant to a human when facing insurance claims fraud. Unlike humans, AI is capable of processing vast amounts of data in real-time and tracking behavioral changes. AI technology draws the handler’s attention to potential threats, which facilitates loss prevention. For example, a policyholder raises a claim that stands out from the previous ones, or he/she had numerous claim rejections recorded in history. AI analyzes the claim value, compares it with the earlier, and notifies the handler about the issue.

However, for all its virtues, AI still remains imperfect and is not able to replace humans in full. Yes, it handles everyday routine tasks quicker and more efficiently than a human. It processes vast amounts of data within seconds, which humans are unable to do. But inability to provide critical assessment to arising issues and absence of out of the box thinking make AI not more than an auxiliary tool for claim handlers and call center operators.

Final thoughts

Growing customers’ expectations and complex healthcare standards make insurance carriers move towards automation and simplicity. Utilizing the capabilities of AI, companies achieve both of these and carry out their mission more efficiently.  

Still Artificial Intelligence is no panacea for insurance companies and can not overcome all the challenges without human participation. It might never become a total replacement for the human brain and eyes, but its implementation today already allows for optimizing employees’ job content and workload while providing a better service to their customers.

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