GLOBAL

VITALITY
CONFERENCE
5 November 2019
Dr Jonathan Broomberg | CEO Discovery Health, South Africa

Shared Value health insurance

Major macro trends shaping global health insurance

Demand side Supply side Data & digital Poor consumer

claims inflation claims inflation technologies experience
01 Demand side inflation | ageing population & rising disease burden

Trends in cause of deaths, deaths (million/year) Risk-adjusted incidence rate for all cancers per 1,000 lives

2008
40 Non-communicable 2.2

1.85X
2017
diseases
30 4.1

20
Communicable diseases 2.2
10

2.02X
Injuries
4.5
0
1990 2000 2010 2020

United Nations projection for 2025 Increase in disease burden of DHMS members, age standardized

21.6%
1 billion
increase in world population by
2025
18.6%

300 million
aged > 65 2013 2014 2015 2016 2017 2018

Source: Internal DH Analysis; PWC: Emerging Trends in Healthcare; United Nations; World Health Organisation; “Chronic Emergency: Why NCDs Matter,” World Bank Health, Nutrition and Population Discussion Paper (2011)
 Supply side inflation | technology, drug improvements and
02 increasing health infrastructure
Average real medical inflation rates by region (2019), %

Asia Pacific 5.8

New cancer treatments approved by

the FDA in 2017
Europe 3.1

Projected global weighted medical

Latin America 7.1
inflation in 2019

Middle East & Africa 9.0

Ratio that medical inflation outstrips
general inflation

North America 8.9

Source: Internal DH Analysis; 2019 Global Medical Trend Survey Report, Willis Towers Watson
 Data & digital technologies | proliferation of digital health apps and
03 services with significant funding available

Total funding for digital health in

2018.Analytics largest category

Telehealth investments 2018 - 2026

of primary care visits at Kaiser Permanente

used virtual tech in 2016

SOURCE: CB Insights Digital Health 150: The Digital Health Start-Ups Redefining the Healthcare Industry (2019); Telehealth at Kaiser Permanente (2018)
 Poor customer experience | market fragmentation, product
04 complexity and poor value for money frustrate customers

When respondents are asked about what frustrates them most in healthcare, the top three answers are:

Difficulties faced in understanding

1 Patients are demanding more sophisticated, convenient,
basic medical costs transparent, affordable and personalized service.
- PWC: Emerging trends in healthcare

Determining whether a
2
treatment would be covered Consumers are demonstrating a lack of trust in
traditional health systems; they are increasingly willing to
entrust their health services to non-health sectors; and
ubiquitous technology is giving them the tools to do so.

- PWC: Emerging trends in healthcare

3 Comprehending their bill

Source: Trends in Healthcare Payments Ninth Annual Report, Instamed (2018); McKinsey’s Consumer Health Insights Survey (2017); PWC: Emerging trends in healthcare
Tackling these challenges | Shared Value Health Insurance
Cost Premium Cost Care Health 1
Value = = X X X X
Member Health Care Premium Member Customer
stickiness

Assets and Tools AI-driven Data-driven Value- Vitality Customer

pricing procureme based behavioural centricity
algorithms nt and care incentives
network programs program
Smart design
benefit
design

Results Improved growth Manage supply Manage demand Manage demand Improved growth
Positive selection inflation side inflation side inflation Lower lapses
Improve quality Positive selection
of care Lower lapses
Full set of tools and systems to support Shared Value Health
Insurance deployment
PRICING AND PROCUREMENT VALUE-BASED VITALITY ADMINISTRATION WORKPLACE HEALTHCARE
PRODUCT DESIGN ADMINISTRATION
AND NETWORK & CARE INCENTIVES & & SERVICING HEALTH SERVICE DELIVERY
SERVICING
DESIGN BEHAVIOURAL PLATFORM SOLUTIONS
PLATFORM

AI-driven pricing Procurement Personalized Behaviour change Holistic health Onsite wellness Home nursing
algorithms integrated incentive insurance claims checks services
condition programme administration and
Product and management servicing platform Executive medical
Network design programmes assessments Pharmaceutical
benefit design
distribution
Integrated software
platform New business and Onsite primary care
Product integration underwriting clinics
• Other insurance Alternative
and financial Care coordination
reimbursement HealthyCompany
services programmes Deep product
strategies AI and data-driven Employee
• Corporate integration service operations Assistance
wellness
Programme

Proven rapid Fraud analytics and ePractice Vitality brand Member and health Wellness coaching,
innovation recovery systems professional apps training and
methods advisory services

DATA & ANALTYICS Data repositories Claims intelligence Business intelligence Operations intelligence Fraud intelligence
Pricing | Advanced pricing analytics – Vitality Health UK
IFRS Gross Earned Premium, GBP

Sustained
revenue
growth

Actuarial loss ratio, %

Lower
claims
ratios

IFRS Profit Before Tax, GBP

Rising
profitability

2014-2015 2015-2016 2016-2017 2017-2018 2018-2019

Procurement & network design | Segmentation and profiling

1 2 3
Population Segmentation Profiling physician usage of investigations Identifying outlier hospitals

Casualty Efficiency
Hospital Efficiency

NB: Tools are categorised by most relevant use, but can also be used against multiple categories
Procurement &
network design

Live claims
risk dashboard
Procurement &
network design

Hospital
admissions
dashboard
Procurement &
network design

Example –
hospital-specific
deep dive
Value-based care | optimising throughout the value chain

Hospitals and Centres of Networks and Condition

Specialists
Excellence Management Programmes

Risk sharing reimbursement Value based contracts with strong Use preferred networks across
contracts including quality metrics focus on outcomes all plans

Cardio Care

Mental health

Diabetes
Vitality incentives & behavioral platform | Expanding Vitality to
members with chronic conditions

Personalized health pathways Health Checks

for each member

Medicine Tracker
Integration with providers
through HealthID

Healthy Food

Linked to Active Rewards 2020

Weight Management

Covering a wide range of

conditions, including:
▪ Diabetes Mental Health
▪ Heart disease
▪ Mental health
Vitality incentives & behavioral platform | Integrating Vitality with
key health behaviours

Physical Mental Financial

activity Wellbeing Wellbeing Nutrition

Weight Workplace Sleep Condition

Management Health Support
Personalised integration| individual risk profile drives activity
recommendations
…that drive personalised
Translating rich data… …into personalised risk drivers…
recommendations

Demographics Health Diabetes Risk

Attributes

Scoring Algorithm Recommendations

Risk of developing diabetes in the

next 2 years is

Hypertension Risk
Healthy Healthy
Activity Activity
Reminder Queue

Member Healthy Activity-

Related Attributes
Risk of developing hypertension in
Nutrition the next 2 years is
Physical Activity
Behaviors Behaviors
Value-based care | Individual recommendations to the treating doctor

Cardio-Metabolic risk

Cardio and Metabolic risk RELATIVE ABSOLUTE

The patient’s risk of developing these cardio-metabolic Clinical drivers of risk

conditions in the next two years
Diabetes Hyperlipidemia Hypertension CVD
45
Diabetes
75 165 Age
Hyperlipidemia
27.5 No
BMI Individual risk drivers
Hypertension Family history from SHAP algorithm

Cardiovascular
See recommendations
disease

Captured
Value-based care | equipping doctors with ways to reduce member risk

Cardio-Metabolic risk

Cardio and Metabolic risk ABSOLUTE

Most frequently
Lifestyle recommendations to reduce cardio-metabolic risk Reduce unhealthy purchased unhealthy Substitution
items per week item in category recommendation
45 27.5 -0.69

1 unhealthy beverage 1 healthy fruit

75 165
-0.53 1
27.5 No
-0.45
BMI (kg.m2)

1 unhealthy protein 1 healthy protein

-0.37 2
-0.31
1 unhealthy starch 1 healthy starch
25.15 3

4 1 unhealthy convenience meal 1 healthy vegetable

5 1 extra activity day 1 extra activity day

Starting BMI 1 2 3 4 5 End BMI

This shows a decrease of 8.5% in BMI over a year

Captured
Health insurance plus Vitality leads to a fully integrated health
insurance and wellness ecosystem
Rich Risk profiling
member data & segmentation

Custom incentives to Personalized goals keep

reward members members engaged

Seamless integration to health Weekly Goal

This week’s
goal is to complete
Reminders keep members
exercise 3 times

system & Vitality partners on their pathways

 From 2020, Discovery will deploy a dedicated
Vitality Health International unit within Vitality Group to
focus on expanding our global footprint in health insurance

Vitality Health International

Equity ownership IP Solutions Consulting

QUESTIONS
ANSWERS