Digital Health Insurance Q&A: Beazley’s Derek Dow

Dow is an industry-leading expert on the evolution of telemedicine, insurance needs in the fast-evolving industry and the challenges and opportunities of protecting this emerging segment.

Telemedicine – and the broader digital health space – has taken off during the COVID-19 pandemic. However, bespoke coverage for the growing industry has existed for years in many markets.

“Canada has a long history of use of telemedicine applications, and in recent years, the number and variety of telehealth activities in Canada have increased dramatically,” Marc Lipman, President of Lloyd’s Canada, said during the presentation.

“Recent changes in the health care system, increased technological capacity and speed as well as government intervention and assistance have all promoted the growth of telemedicine and other related practices. The pace of growth is apparent in the increases in the number of companies offering telehealth products and services, and the adoption by public organizations of telehealth technologies for a wider range of applications,” Lipman added.

In the following Q&A, Dow shares background on the digital health sector and the key highlights from his presentation.

Q: Let’s start at the beginning. When did the demand for telemedicine coverage enter the market?

A: While COVID-19 has exacerbated the demand for telemedicine services – and various offerings across the overall digital health sector – I like to dispel the myth that it’s a “new” market. Telemedicine has its origins in 1970s in Canada. It started quite simply, with a physician offering care via telephone calls for patients in rural areas.

The digital health space has been a growing segment for quite some time – and it might be needed more now than ever. The growth is certainly rapid – and much more so than in a 2020 without the challenges presented by the pandemic.

Prior to 2010, we wrote our first virtual care coverage. Our bespoke offering, Beazley Virtual Care, launched in the US in 2017 and UK in 2019, and in Canada, it coincidentally launched in March 2020. We were literally launching the product in Canada as COVID-19 took its first strides into the center of our everyday lives, however our virtual care solution was being developed well before.

Q: Even without the additional urgency that a global pandemic provides, the Canadian climate and geography are particularly well-suited to the adoption of digital health. What’s next for the market post-pandemic?

A: The geography in Canada is a neat example – and similar to many other countries.

There are huge clusters of population around urban centers, but people are quite spread out in rural communities. In a rural community, when physicians retire, it has become increasingly challenging to recruit new doctors to these markets. As a result, many individuals in rural areas may have to travel several hours each way to see a general practitioner – and it can be nearly impossible to make that trek during the depths of a Canadian winter.

Telemedicine is a natural solution to that problem. It provides access, convenience, and real-time care. It’s very consumer centric. While it’s not a replacement for in-person care, it’s a “nice-to-have” in a lot of circumstances during the pandemic.

After COVID-19 subsides, we’ll likely see a solution that strikes a balance between virtual and in-person care. There is care that people can’t get virtually. We’re going to need to find a balance in the longer term. The biggest question will be: What role will digital health play in the continuum of care for people?

Q: How has the digital health market changed during the pandemic? How has the rapid adoption of new business models – including more demand for telemedicine – led to new risks in the space?

A: Quite simply, the pandemic has skyrocketed the demand for digital health services, and in turn, it has increased demand for coverage across the board.

Amid the pandemic, we’re seeing some forms of care transitioning to a virtual setting that might not have adopted virtual care as quickly.

For example, a physical therapist might have looked at telemedicine at this time last year and not seen a lot of value in the space. However, with COVID-19, the move to digital becomes a necessity. COVID-19 made people look at the traditional care model in a different way. Many healthcare professionals were forced to find new solutions. Virtual care let practitioners find middle ground between pre-pandemic “normal” operations and not being able to operate at all because of the pandemic and public health restrictions.

Once you start going deeper, you quickly realize digital health is much bigger than telemedicine. It’s a burgeoning industry including telehealth platforms to connect patients to physicians and to share information but also wearables and lifestyle apps used by individuals to track their health.

Q: Talk a bit about the range of risks in the telemedicine space. How is coverage structured for different telemedicine players? What kind of protection do you offer to a hospital vs. an app developer?

The degree of risk can vary greatly if you are a clinic or an app keeping track of weight loss goals. One common factor across it all is that there is really a patchwork of risks – and in many cases addressed by a piecemeal approach of several insurance policies.

Beazley’s Virtual Care offering is underpinned by bodily injury cover – which we view as a necessity across all digital health insurance programs almost regardless of what segment of the industry the insured is in.

Take a fall detection pendant that alerts authorities when a fall occurs as an example. If an individual takes a fall and nothing happens, that’s a problem, and potentially a claim. However, the first question an insurer needs to answer is, what caused the problem? It could be the physical pendant itself, the signal to the tech platform or perhaps a combination of these and other factors, such as a failure to notify first responders.