Renée-Marie Stephano, JD, CEO and Founder, Global Healthcare Resources, recently had the opportunity to sit down with Laurent Pochat-Cottilloux, Global Head of Health Reinsurance Partnerships for AXA to talk about what the global reinsurance market, how the market is changing, technology’s role in developing future programs, and the value of accreditation.
Renée-Marie Stephano: Can you please tell us a little about your background and current role at AXA?
Laurent Pochat-Cottilloux: I have focused on health insurance throughout my entire 20-odd-year career. I started as a number cruncher in the actuarial department. I then moved to the joys of pricing, hospital procurement, health IT, international coverage, and reinsurance – virtually every facet of how to create a product that works for both the customer and the insurance company.
I am currently leading the reinsurance partnership activities of AXA’s specialist global healthcare team. My role is to find insurance companies around the world interested in stepping up their presence – or entering into – health insurance.
Alongside the traditional reinsurer contributions (pricing, underwriting, risk-transfer) we offer access to AXA’s operational assets: a worldwide hospital network with cashless access claims management services, and 24/7 international assistance in case of emergencies.
RMS: Tell us a little about AXA, and why it’s a global leader.
LPC: AXA was recognized for the eighth year running as the leading global insurance brand by Interbrand. We are in more than 60 countries offering property, life, and health insurance to more than 100 million customers.
Health insurance gets particular attention in our group as a fast-growing segment, providing an opportunity to create genuine engagement with our customers – especially as we move from health payer to health partner.
RMS: How has global health insurance transformed in the past, and how will it continue to change in the future?
LPC: Most of our health insurance products provide coverage for treatment received solely in our customers’ primary country of residence. Some offer cross-border coverage, like the comprehensive programs we provide to expatriate employee populations of multinational corporations or the products bought by affluent people in developing markets to receive access to nearby centers of medical excellence in their region.
Given the speed with which these emerging middle classes are growing – be it in China, India, South-East Asia, South America or Africa – we see the relative importance of these regional products increase as well.
While European- and U.S.-based corporations still need to send their best people to look for new opportunities in new markets, these traditional expat assignments tend to get shorter. We also see more employees posted abroad by corporations headquartered in Asia.
RMS: What opportunities do you see in medical tourism and cross-border healthcare?
LPC: Medical tourism is a fast-growing industry, and this is not surprising. The emerging middle classes I mentioned earlier are increasingly looking abroad for medical care as they realize the quality of treatment they are looking for is often not available locally (or the waiting list is too long). In an increasingly globalizing world with cheap air travel, countries compete with each other to attract relatively wealthy medical tourists to their hospitals and clinics.
We also see a “reverse flow” of people traveling from mature markets to access treatment perhaps not be covered on their insurance plans, like cosmetic or infertility procedures, or only partially funded, like dental treatment. Estimates are hard to come by, but some studies have put the number of medical travelers at 11-14 million annually – and this number grows by 15-25 percent a year depending on the region.
Companies that build peer review platforms to help would-be medical travelers find the best doctor and facility for their needs, similar to platforms already available for vacation travel, should be able to scale-up quickly in this environment. This also presents opportunities for hospitals, accreditation bodies, and insurance companies.
RMS: Do you have any estimates or forecasts in the future how many policies will allow for cross-border coverage? And how has demand for that over the last few years changed (either increased or decreased or stayed steady)
LPC: Broadly speaking, the health market is split between a high-end segment like global policies for corporate expats, mid-market including products for the aspiring middle classes, and low-end such as entry-level products often sold as riders to life insurance.
It is in the mid-market segment that we see the most substantial growth. Although this section probably doesn’t represent more than 15 percent of total health insurance premiums today, it grows by roughly twice the rate of the other two and is more profitable due to is less market competition.
RMS: What do you see as the challenges preventing health insurance companies adopt and offer medical tourism and health insurance policies that cover members globally?
LPC: Insurance is a data-driven business. Traditional health insurance product design and pricing rely on being able to gather and analyze the “utilization data” (e.g., past claims) of a population within a defined territory. They ask questions like how many times a year on average will my customers go to see a family doctor, a specialist or need to go to a hospital? How much will each episode of care cost me, the insurer?
The snag is that only a few companies in the world have reliable data about cross-border healthcare utilization: what is the propensity of my customer to go abroad for this particular type of treatment, where will they go, how much will it cost me when they get there? That’s not all. Once you have designed and priced the product, you also need to be able to negotiate with providers all over the world to ensure they don’t overcharge you and accept your customers on a cashless basis.
Then you need your customer care teams to understand the local context of the country where the medical treatment is taking place. All of this requires time and a lot of dedication to what is still mostly a niche product. It is a long and arduous route, although, for companies that manage to develop or source the correct mix of capabilities, cross-border health insurance is typically a more rewarding product than a purely domestic product line.
RMS: What did you learn about the medical tourism industry that surprised you the most?
LPC: Before I had a chance to take a long look at the way different countries look at the sector, I had underestimated the complexity behind a successful medical tourism growth strategy. In particular, the need to involve many stakeholders and how to carefully coordinate them.
At a minimum, you need to identify and work with a few selected hospitals with the capability and willingness to attract international patients; endorse and possibly make mandatory an accreditation scheme for providers and facilitators; minimize visa requirements for medical travelers; set-up a council to market and manage your destination’ USPs.
To be successful, you need to foster collaboration between government departments that do not typically work together (Interior, Finance, Health, and Tourism) and private hospital operators – which is not an easy thing to accomplish.
RMS: Will AXA be trying any unique strategies or concepts in this space?
LPC: Apart from developing our cross-border healthcare offering through partnerships in as many markets as possible, we are also looking at the less-noticed segment of Medical Complications Insurance. This product is typically bought at the same time as the medical trip is arranged. It covers the risks associated with the trip.
The insurance would reimburse your surgery deposit if you had to cancel, it would pay for additional days on location if more recovery time or post-operative consultations were needed, and it would pay if you had to incur extra costs due to post-operative complications. This is separate from medical malpractice insurance, which is purchased by doctors – it only covers the consequences of “no-fault” complications, not negligence.
Aside from its potential as a retail product, distributed by facilitators or medical travel portals, this type of product has potential in a B2B context (hospitals could buy coverage for all their international patients, as part of their packages) and B2G (governments could cover all their outbound citizens as part of their national health insurance, or all their inbound patients as a way to promote their destination).
RMS: How will new technologies like telehealth solutions, wearables, patient management systems impact the future of medical travel?
LPC: Today, medical travel is still primarily done on a bespoke basis for each trip. We are starting to see the emergence of integrated platforms that include teleconsultations pre- and post-trip, billing, and medical records management. In the future, we will also see patients review doctors and hospitals, and published outcomes measures like readmission rates and HAI rates.
This will help the industry standardize, scale-up, and help travelers choose, book and pay for their treatment in ever higher numbers. Technology also presents some opportunities in the area of translation into the patient’s language. We may also soon see the deployment of AI at the front-end, to guide patients who present themselves with a specific set of symptoms towards the most appropriate care setting, which may be local or overseas.
RMS: You are on the board of Global Healthcare Accreditation (GHA) a body encouraging healthcare providers to adopt standards and best practices to improve the patient experience and excellence of care received by medical travelers across the care continuum both inside and outside the clinical environment. What do you think the value of accreditation is and the role of an organization like GHA?
LPC: Since the first international accreditation, Accreditation Canada vetting the Bermuda Hospital Board in 1968, these independent bodies have played a crucial part in the growth of medical travel. They are not just about improving how care is delivered to patients. They help would-be medial travelers navigate an incredibly complex system by providing quality hallmarks that help answer the critical question: how do I know if a hospital is as good as they say?
They also prompt hospitals to do some soul-searching. It is not just about demonstrating that you follow processes and a set of standards, it is about self-examination and continuous improvement. GHA is an excellent addition to the accreditation landscape in that it focuses specifically on the non-clinical aspects of the international patient pathway through the healthcare system: before admission, during the stay, and after discharge.
For example, they look at the quality of the information provided on the hospital website, or how medical records are submitted to the patient after their stay. These aspects tend to be ignored by other accreditation bodies which tend to take a less “holistic” approach.
RMS: How important is it for AXA that its members receive the best care and have a fantastic patient experience?
LPC: When we sell insurance, we sell a vague promise: “in the future, when you claim for something that is covered under your policy, we will pay.” With health insurance, this moment of truth is not just about us paying the claim; it is also about the patient receiving the care they need. Unlike a broken windscreen, a lost suitcase, or a flooded kitchen, we are talking about an immensely personal and potentially life-or-death situation.
This is where the “from payer to partner” vision comes into its own: while we are not involved in making clinical decisions, we think that we have a prominent role to play to reduce the likelihood of substandard care. We often bundle into our products a second medical opinion service that would activate if we suspect that the patient could benefit from it.
For complex cases, cancer in particular, in some geographies we will assign a personal case manager to help the patient and their family through this difficult time. More fundamentally, we always carefully screen the providers that are part of the AXA’s global network to make sure that they follow the medical best practices.
RMS: Do you think there will be significant investment in medical tourism by investors or banks soon?
LPC: Ever since the 18th century when wealthy Europeans started visiting spa towns far away from where they lived, medical tourism has gone from strength to strength. The globalization of medicine, availability of air travel, the global shortage of medical staff, ever-increasing cost of medical technology, limited funding for national health systems all contribute towards the formation of specialized medical centers of excellence who attract patients from all other the world.
On the demand side, the never-ending growth of the middle class, from Mexico to Indonesia, who are getting older and suffer increasingly from lifestyle diseases of a chronic nature, and have higher expectations of medicine than their parents, will continue to support the development of medical tourism for the foreseeable future.
As the amount of money flowing into the sector (from medical travel platforms to hospitals and international accreditations) over recent years shows, we can be sure that investors have noticed.