The role of insurance in drug coverage

In recent years, the health insurance market has been concerned about two issues, one is how to deal with the decline in premium income growth, which not only appears in the Chinese market, but also appears in the US commercial health insurance market coverage ceiling
.
The second is how to balance
the relationship between health insurance and high medical expenses, especially expensive drugs.
This issue is a growing concern, with specialty drugs accounting for 53% of total drug spending, although prescriptions account for only 2%
of overall drug spending in the United States.
In recent years, with the innovation of medical technology, various new therapies and new special drugs have entered China, and these expensive products and therapies are facing huge price reduction pressure brought about by medical insurance negotiations, and they are also seeking other payers
.

In the above context, many companies in the market are thinking about health insurance as a commercial payer, and high-cost items, especially expensive special drugs, new self-funded surgical projects, what kind of relationship, how to protect expensive medical projects, not only to obtain the value of protection, but also to obtain growth opportunities in the overall stall of health insurance in the Chinese market, which has become the thinking
of all walks of life in the market.

This report will be analyzed at two levels for the two aspects mentioned above:

The first level is to analyze
from the three markets of the United States, Taiwan and Chinese mainland.
The development of commercial insurance and PBM in the United States has become more and more closely synergistic, insurance companies on the one hand facing the pressure of slowing down the growth rate of group insurance, on the other hand facing the increase in expensive treatment costs, so more and more commercial insurance companies directly enter the PBM field, and acquire special drug chain pharmacies, seize the prescription entrance, through the income of PBM to expand the scale of the company
.
However, the middleman model of PBM has also been questioned by the market, and the model of taking advantage of the opaque drug price and profiting from both the payer and the retail end has been investigated by the US regulatory authorities and faces stricter management measures
.

In Taiwan, the implementation of DRG has brought about a shortening of the number of hospital stays, the transfer of expensive treatment costs to outpatient clinics, and changes
in the commercial insurance market.
On the one hand, a few years after the implementation of DRG, the growth rate of health insurance personal insurance sales has increased, which shows that DRG has also promoted the development of health insurance, especially the importance of high medical expenses such as cancer drugs, expensive surgical treatment and other costs in products
.
In terms of cancer protection, commercial insurance companies deepen high medical protection
through bundled products that combine sales, reimbursement + course of treatment.
At the same time, it is assumed that the portfolio strategy is produced
in the context of high per capita income.

In the Chinese mainland market, in recent years, Huimin Insurance's special drug protection, drug insurance, and products containing special drug protection in millions of medical insurance have achieved certain development
.
Huimin Insurance includes more special drugs outside medical insurance, while millions of medical insurance and drug insurance still have a larger proportion of drugs within medical insurance
.
Bundling high-priced drug protection on short-term insurance requires a higher amount of insurance to allocate the risk, and due to the low price of short-term insurance, the relationship and sustainability of high-priced drugs are still challenging
.

The second level is what position the low-frequency high-cost medical insurance and high-frequency consumer services and guarantees are in for commercial insurance companies, and how to complement each other
.
High medical expenses, such as critical illnesses, surgeries, and special drugs, occur at a low frequency in the entire insured population, and these products are prone to less communication nodes with users, which is not conducive to combination sales, re-sales, and even long-term customer retention challenges
.
At this time, it is necessary to compensate
for it through high-frequency consumer services and products.

Insurance companies in Taiwan have more products in the critical illness long-term insurance to increase health promotion products and services, the most direct incentive is to exercise incentives to obtain premium reduction, other health promotion services also include healthy diet, fitness, nutrition coupons, through the mall selective issuance, giving users high-frequency, universal choice
.
U.
S.
companies, on the other hand, have more practices
for combining high and low frequencies.
CVS has developed HealthHub with a larger area and more complete health services and products in retail pharmacies, and upgraded the membership system of retail pharmacies, using higher-frequency services such as daily medication and health management to keep users in their hands for a long time, so as to better hold users
in low-frequency and high-cost medical expenses and services.

The collaboration between Vitality and John Hancock shows the value of grafting health promotion and consumption services on long-term insurance, which helps to tap the long-term value
of users through direct stimulation of health consumption and premium reduction applicable to most people 。 Moreover, in Medicare Advantage products, US insurance companies have an increasing proportion of OTC subsidies, on the one hand, to avoid the control of higher medical costs caused by untimely control of emergencies, on the other hand, because MA users are retired elderly, the demand for OTC is relatively high-frequency, which is valuable
for user experience and customer retention.
These cases can give the market tips on how to provide protection for low-frequency medical expenses, target users' spending pain points, but increase user stickiness through high-frequency consumer services and products to retain customers
.

From the above two levels of analysis, this report attempts to find strategic cooperation and development ideas for commercial health insurance with high expenditures, especially expensive drugs, and provides a thinking direction
for analyzing the relationship between low-frequency expenditure protection and high-frequency health consumer products and services.