Dowdall's healthy vision for Irish Life
Irish Life's Jim Dowdall says insurers will use wearable tech to monitor you - but it is nothing to fear
It may be the rarified high-tech atmosphere in the brand new innovation hub, but Irish Life Health managing director Jim Dowdall has no problem happily imagining a future that others might just see as Orwellian.
The builders, interior designers and trendy lighting specialists have barely left the Exo Hub - the beautifully-designed blue-sky-thinking facility for the wider insurance and investment group at its sprawling office campus off Dublin's Abbey Street - but Dowdall is already envisaging a brave new world of digital innovation for the health insurance provider he leads for the PLC.
Exo Hub is the physical manifestation of Irish Life's determination to place technology startups and digital innovation at the core of all of its businesses, not least the health insurance arm that it created through acquisitions and a merger two years ago.
Drawing on this techy vibe, Dowdall paints a picture of a world where health insurance customers don wearable devices to potentially transmit all sorts of detailed and sensitive medical data so insurers can monitor the health and activity status of clients from afar.
"One of our problems with the Irish health system - and particularly with insurance - is it has remained the same as it was 20 years ago. It hasn't evolved," he says.
That has to change if the entire sector is to remain sustainable, he says. Wearable technology is just one of the many innovations he says can help. It is of particular interest to the health-insurance industry, given 50 million of the devices will be in use globally by 2020. Step counters, for example, could allow insurance companies to give discounts to customers who hit activity targets and clinical level data can be used to protect the vulnerable from afar.
"You can have much more monitoring of people's health and well-being," says Dowdall. "You can pre-empt and identify potential risks and exposures. That can be fed back into the health system where someone can intervene and address issues before they become an incident."
For now, he says, regulation here does not allow an insurer to use data for these types of purposes. No doubt many consumers would be initially horrified to see those rules change. But Dowdall says fears that insurance companies would use this sort of data against people rather than for them are misplaced.
"I think it comes down to trust. The partnership I would love us to be able to have with customers is that we can work with you to develop programmes and provide you with tools to let you track your own health condition and we can respond to the improvements you are making," he says.
"Our vision is about helping our customers live healthier lives and if we can do that through new technologies I don't think we should be afraid of doing that. This is not about trying to catch people out. It is about developing programmes that are shaped for you to improve the quality of your health and well being."
The ability to seriously consider these types of innovations is one of the great benefits that Dowdall sees from the acquisitions and then merger that brought Aviva Health and Glohealth under the Irish Life umbrella two-and-a-half years ago. "We have scope now to invest in new things," he says.
Dowdall has been involved in just about every health insurance upstart that has come in to take a slice of a once closed market in the last 15 years - ever since he threw in his lot with former VHI chief executive Oliver Tattan's Vivas Health in 2004.
"We created something from nothing. Since starting from zero in 2004, our companies combined have paid in excess of €1.5bn for healthcare for our customers. We have grown a successful business that now employs over 400 people," he says.
"The health insurance businesses I have been part of have led the way in terms of innovation because they had to, because they were small startup businesses. We now have an opportunity to accelerate the pace. It means we can do things in the years ahead that we could never have done on our own."
Dowdall actually began his career in the Irish Life technology department straight out of school, where he worked for 14 years before moving to US multinational Amdahl in 1996. Then in 2004 he met Tattan and Vivas co-founder Stephen Loughman, who were planning to set up Vivas to take on the might of VHI, and Dowdall decided to join forces with them. "I knew nothing about health insurance, but I had the ambition to do something different," he says.
The gamble paid off and Vivas was ultimately bought by Hibernian Aviva.
But Dowdall still had the startup bug and he and Loughman decided to step away and set up another new player, Glohealth: "It was deja vu but we had so much more experience and we brought a product to the market that was all about tailoring and personalisation."
Irish Life came on board as an investor and then in 2016 the PLC acquired both Aviva Health and Glohealth and put the two together to create Irish Life Health.
The company now has just over 20pc of the health insurance market - about 450,000 customers, up 30,000 since the merger.
"When we started out in health insurance the emphasis was on having cover when you were ill or in hospital. Basically, sickness insurance. Competition in the market has moved that towards health insurance."
But it's not all good news in the sector, he says.
"Affordability is the single biggest challenge that we have. A lot of individuals are not seeing the benefits from the economic recovery and health insurance costs have increased over the last number of years. So it is incumbent on all of us to find every opportunity to keep our costs down."
Demographics are also problematic. In 10 years' time there will be more than 200,000 more people over the age of 65 than there are today. "We need to respond to that. We will need to build three more Beaumont Hospitals just to maintain the health system where it is at today," he says.
Ever-growing obesity and chronic disease levels take up 40pc of Irish hospital budgets annually and this is an area where he believes technology can help most.
"You can't cure chronic disease. You can only prevent it. And the single biggest intervention we can make is around physical activity. So my view is that we should have an opportunity to incentivise people to take control and improve their health and well-being. That's because it is in their interests, but it is also in the interests of the overall health system - whether that is through discounts to their premium or some other mechanism, regulation should let us do that because motivators like that can work."
An Irish Life Health study in conjunction with DCU sports science expert Niall Moyna has found that a third of 16-year-old girls and 40pc of 16-year-old boys don't meet the minimum fitness levels for children.
"The impact of this is that unfit transition-year boys have the same heart health as a 69-year-old. We are seeing an obesity crisis coming at us that we cannot afford. Previously the healthcare system was constrained by people as they got older and sicker. Now we have pressures coming on the health system from the younger population, and we have to intervene.
"We need to put a break on some of the increases that are coming through from private hospitals that just drive up the cost of health insurance. We don't have an opportunity to negotiate with the public system - we are a price taker, all health insurers are. But we need to engage with the Department of Health and the Minister to ensure that policy decisions they are making aren't going to impact on people opting to have private health insurance on the back of what they have already paid for in the public system."
In 2014 then Health Minister James Reilly changed the regulations which has led to a situation whereby if a patient with private health insurance attends a public hospital and signs a form to waive their right to be treated as a public patient then their health insurer was liable to pay, even if they ended up on a trolley. Previously, their insurer would be only charged for additional services, for example, a private room.
"That has been the single biggest driver of health insurance increases over recent years. There are so many challenges in our health system but one of the important ones is to put some integrity back in the system. People going in, being asked to sign forms that are not being explained but which waive their right to be treated as a public patient. As a result of that, their health insurer is picking up significant additional charges for no extra value. That needs to be fixed because it is inequitable. People who have already funded the public health system through their taxes and have opted to take out care, which alleviates demand on the public system, are now being penalised by being double charged for a service that they have already paid for. It is something that should be looked at by the Minister and the Department of Health."
Dowdall says Irish Life Health customers have been told by the company that if they are in a public hospital and they are asked to sign a waiver that they should first ask what additional services they will get.
"If they are given additional services such as a private or semi-private room they should consider signing the form if they are getting something for it. If they are receiving no additional care or treatment they should question whether they should sign it because it is just putting up the costs of health insurance. We have had a very strong response from customers when they were educated about this. We have seen cases in different hospitals where people have been harassed throughout the night to continuously try to get them to sign forms. People are being sent forms after they've been discharged looking for a signature so that the hospital can actually charge for services that weren't provided."
Dowdall believes that some of the country's public hospitals see it as a revenue-raising measure.
Insurers had been told at the time that the measure would raise an extra €30m to €45m of revenue for the government: "It quickly went up to being an opportunity for a cash grab for some hospitals and it is now raising around €150m. The commitment from the minister was that if it raised more than that it would be changed and it hasn't been changed.
"The HSE, in my view, see this as an opportunity to raise money and doesn't consider the implications for people and doesn't consider whether this is right. The challenge is to put some integrity back in the system."
Dowdall believes the health system in Ireland is too politicised and that sometimes decisions are made on the basis of the next election cycle: "We can't make decisions that are localised and short-term. We need 10- or 20-year views and start responding to the challenges of increased population and growing obesity. The obvious example of this that has worked is a decision to develop centres of excellence rather than having too many hospitals trying to be all things to all men," he says.
When Dowdall first became involved in the health insurance market the key focus for new incumbents was just how to survive alongside the monolithic VHI in a system that he and others vociferously argued was weighted heavily in its favour. With Laya and Irish Life now controlling half the market, the previous rows about community rating and risk equalisation - a mechanism to allow people pay the same for health insurance regardless of age - are no longer quite as pressing. But, he says, in reality not much has changed.
"The current system that we have is not sustainable into the future at a time when we have a significantly ageing population. We are so dependent on bringing in younger people to the system to subsidise the costs of older people and we don't do that today. We have a health insurance levy scheme that is a very significant cost and is completely inequitable."
That scheme means adults are charged a government levy of €444 regardless of their level of cover. So a young person on a basic plan that costs €1,000 a year includes the same levy as someone who is paying for the most expensive €6,000 plan.
"So one person is paying a levy of over 40pc while another is paying as low as 7pc. That has to change and a percentage model has to be introduced."
So why are such seemingly obvious and equitable changes not being introduced into the market? Dowdall believes that it does not help that the regulator reports into the Department of Health and the same department sets the charges for access to the public health by insurers, not to mention that it also owns the largest health insurer in the market.
"People are slow to change and slow to recognise that there is a better system and we need to evolve towards it."
As he sits back and enjoys the brand new innovation hub built by a parent company looking to make a big splash in health insurance, it is hard not to get the sense that Dowdall will be staying at the cutting edge of the sector, wherever that will take it next.
Sunday Indo Business