“Disruptive” DIGITAL BUSINESS MODELS For Health Insurers

The Top 10 [Ten] Disruptive Digital Business Models For Health Insurers

By Zhang Jie

Digital technologies will transform the health insurance business. Early adopters have started to implement new digital business models with initial success. A new report describes ten digital business models for health insurers that will disrupt the industry.

Dear Dr. David Marcinko and all ME-P Readers,

We are excited to announce the release of Research2Guidance’s new “The 10 Disruptive Digital Business Models for Health Insurers” report.

Please find below the special report story.

Advances in higher-quality digital technology—especially apps, sensors, and artificial intelligence (AI)—along with their proliferation among members have spurred the emergence of new business models.

The new report “The 10 Disruptive Digital Business Models for Health Insurers” published by Research2Guidance describes how start-ups, health insurance and general payer organizations have started using these technologies to venture into new forms of health insurance offerings and increasingly step into the healthcare provider role.

New digital models change the way the insurers interact with patients. For example, digital insurers have reworked the trust equation with the patient, outsourced much of their value chain to their members, and now know much more about them. Digital business models tend to also blur the lines between payer and care giver organizations. Some of the first-movers already crossed the line and started to offer services which have previously been provided exclusively by doctors and nurses. The ten digital business models are defined as follows:

  1. Digitally assisted member acquisition is a freemium business model concept.
  2. Mobile health concierge is a business approach designed for members to complete all health insurance tasks using mobile phones with the support from a concierge team.
  3. Peer-to-peer (P2P) insurance refers to a risk-sharing community.
  4. Mobile micro-insurance refers to the health insurance plans that cover short-term small health events or minimal ongoing health insurance.
  5. Health insurers tech platforms license their technology for the management of health plans and members to their customers.
  6. On-demand insurance is a usage-based model that enables members to access desired health plans upon request with the help of a mobile app.
  7. High-risk patient preventive care model concentrates on insuring and managing potentially costly patient groups.
  8. The payer & provider collaboration model stands for a closer, digitally enabled partnership between payers and care providers, especially hospitals.
  9. The API health insurance model uses a list of pre-defined health insurance products accessible to websites and app providers via an application programming interface (API).
  10. Direct primary care model. Within this model, a care provider or a hospital act like a health insurance company using a monthly subscription model.

First implementations of these models indicate the positive impact that they have on the company evaluation, the ability to attract new members, the cost structure, and new revenue streams. Currently, the main impact of digital business models is on company evaluation, which reflects the hype that some companies have created in the investor community. Companies like Oscar, Clover Health, and Bright Health are valued at over $1 billion USD each after only a few years of operation.

Health insurers and start-ups from the USA and China are the most aggressive in adopting new digital business models. Companies from other regions tend to choose a follower approach or implement copycats.


The report also profiles first-mover digital implementations. Profiles include their target groups, operating models, service offerings, and early evidence for success where available.


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“Business of Medical Practice 2.0” https://tinyurl.com/yb3x6wr8


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3 Responses

  1. Digital Behavioral Health Companies Have Raised $416M So Far in 2019

    Rock Health recently published an analysis of digital health venture funding. Here are some key findings from the report:

    • Digital health companies raised $1.3B in venture capital in Q3 2019 (total of $5.5B in 2019).
    • The average digital health deal size in 2019 is $20.9M, up 32% from 2017.
    • The number of digital health deals in 2019 are expected to be 5-10% lower than in 2018.
    • Funding for digital women’s health companies increased 812% across 2014-2018.
    • Through Q3 2019, 16 digital behavioral health companies raised $416M (8% of total funding).

    Source: Rock Health, October 2019


  2. OSCAR

    The company, which has 420,000 health plan enrollees and was last valued at $3.2 billion, was cofounded by Josh Kushner, brother of President Trump’s son-in-law and senior advisor Jared Kushner.

    In its early days, Oscar’s primary revenue stream was selling insurance plans under the Affordable Care Act, aka Obamacare, legislation the Trump administration has tried to repeal numerous times.

    In terms of the pandemic’s effect on its business, Oscar resembles Zoom more than Carnival. With money tight and health a priority for many, Obamacare signups for 2021 have remained strong. And Oscar says more than 30% of its customers use its growing telemedicine services.

    Bottom line: Considering fellow “insuratech” platform Lemonade’s 273% gain since its IPO this summer and President-elect Joe Biden’s promise to reinvigorate the ACA, investors might take a fancy to Oscar when it makes its debut.



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