I'm a sucker for driverless cars. I've only owned cars with manual transmissions, and in recent years I've been telling people that I'm more likely to jump straight to a self-driving car than to simply get an automatic transmission. There's lots going on in the field these days, but what caught my eye was a new report from KPMG that forecast the number of auto accidents could drop 80% due to autonomous cars, shrinking the auto insurance industry by some 60%. They are not alone in these kind of predictions.
We should be talking about those kinds of changes for health insurance, and health care more generally.
Most of us drive, and most of us probably think we're good drivers -- it's all those other bad drivers! -- but over 90% of auto accidents are caused by human error. No wonder; there are so many other things we'd rather be doing, like texting or talking on our phone. Maybe even checking our destination on Yelp or Google Maps. They even have a name for this -- distracted driving -- with plenty of grim statistics that you'd think would deter us, but which do not.
Google has gotten lots of press for its driverless car project, but we've been heading this direction for some time. For example, cruise control and anti-lock brakes have been routine for decades, but now there are also self-parking cars and ones that can alert you when other cars or objects are too close. Tesla is in beta with a feature to let your car essentially valet itself (although they've already had to put further restrictions on it), and Elton Musk thinks fully autonomous cars will be ready in 2-3 years.
All this is in line with KPMG's prediction that by 2025 we'll be in an autonomous car world, with consumers shifting over to it by 2040. That's when the auto insurance industry will be in big trouble, at least in its current form.
The industry executives KPMG surveyed aren't worried yet. Only 29% felt they were very knowledgeable about autonomous cars, with 23% claiming to know nothing about them. Most felt that their business wouldn't be impacted for at least ten years. When the changes come, the executives thought that their focus would move more towards commercial, instead of personal, auto lines, and they expected new competitors would include tech companies like Google and the auto manufacturers themselves.
Perhaps it is no surprise, then, that GM just invested $500 million in Lyft, hedging its bet not only on a self-driving world but one where car ownership shifts to the "Uber" (sorry, Lyft!) model where cars are available on demand, with someone else doing the driving. That model really disrupts the traditional auto industry, as it removes much of the personal attachment most of us have historically felt about our cars.
Once it isn't our car and we're relying on another driver anyway, do we really care if that driver is the car itself? We just want to get where we're going safely, and, oh-by-the-way, more cost-effectively.
It won't just be the auto insurance industry that will be impacted by these trends. The whole ecosystem will be: car manufacturers, parts manufacturers, repair shops, rental companies, gas stations and oil companies, and advertising agencies. to name a few. The changes will be bigger than we realize and sooner than we expect.
All that is very interesting, but what does it have to do with health care or health insurance?
When it comes to managing our health, we're not much better than we are with our driving. We weigh too much, we eat the wrong things, we don't get enough exercise or sleep, we have too much stress, and when we do get medical care, we often don't listen to or understand our doctors, or simply don't follow their instructions. If any area of our lives seems like it needs someone/something to take over for our (poor) judgement, it would seem to be in regard to our health.
We might think those auto insurance executives who believe they have ten years to get ready are being short-sighted, but no one in health care should be feeling any better about its existing model. The seeds for similar disruption are already here for health care as well.
Telemedicine, AI advice, digital tracking, and consumer diagnostic tests -- all these are the kinds of things that have the potential to take the locus away from your friendly local physician/hospital/lab/pharmacy/imaging center. They are slowly working their way through the laborious regulatory system and the consumer acceptance stage, just as they are for autonomous cars and the ride-sharing industry. But it would be foolish to believe that they won't become mainstream.
Of course, short of uploading our minds to live inside an android or a robot, it would be hard to fully delegate our health to some third party. I've previously made a pitch for an omnipresent digital health assistant that would help guide us to better health choices, but we're not quite there yet.
That's why perhaps wearables/digital health are the most likely bet in the short term. We're seeing traditional tools like stethoscopes being replaced by digital options, lab testing being ordered by, and results delivered to, consumers, and an array of other self-monitoring options. Two-thirds of Americans say they are willing to use digital health tools.
Products like Apple Watch, Samsung Gear, or Fitbit are all doing their best to be a ubiquitous and value-added presence in our lives. Whether they can actually help us improve our health remains to be seen, with early results indicating...maybe.
Health care professionals think that their revenue can only go up -- here's looking at you, drug companies! -- but I'm convinced that well before the auto insurance industry suffers its big decline in revenues, health care will have already done so.
We've used "consumer-directed" as shorthand for making consumers responsible for more of the bill and "patient-centered" as shorthand for getting all the various health care professionals involved in delivering a patient's care to talk to each other, but in both cases without truly changing any of the fundamental dynamics. Perhaps the real parallel to driving is not handing management of our health over to some third party -- which we've done too much of already -- but in actually taking control of it.
When it comes to health, the "self-driver" is us.