Artificial intelligence (AI) is bringing transformative changes to the health insurance industry that are likely to accelerate further in 2023. Here are three major ways insurers are already using AI to operate more efficiently and enhance customer experiences:
- Detecting fraud faster and more accurately
- Streamlining customer service through chatbots
- Offering personalized care recommendations
In this article, we‘ll explore real-world examples of these AI applications and the measurable benefits they‘re delivering. By automating repetitive tasks and uncovering insights from data, AI enables insurers to reduce costs, improve service, and tailor offerings. Let‘s look at how!
AI is a Game Changer for Identifying Fraud
Fraud costs the US healthcare industry close to $300 billion annually according to FBI estimates. For health insurers, fraudulent claims add up to billions in unnecessary payouts and administrative costs. Traditionally, claims examiners manually reviewed claims to try catching suspect ones. But this approach still left many fraudulent claims undetected.
With AI systems automating behind the scenes, insurers can now spot fraudulent claims with far greater speed and accuracy. One major technique is using natural language processing (NLP) to analyze the text of claims submitted. NLP algorithms can identify claims containing verbiage and word patterns that resemble past fraud cases.
For example, Optum applied NLP and other AI technologies to achieve 95% accuracy in flagging improper claims, reducing investigation time by 75%. This cut Optum‘s total loss from fraudulent claims by a whopping $3 billion!
Machine learning techniques also help by uncovering anomalies and suspicious patterns across huge datasets of historical claims, prescriptions, clinical notes, lab tests, and more. By integrating all this data, the AI models build a baseline understanding of normal behavior versus fraud indicators.
Anthem demonstrated this with its Fraud Prevention System (FPS), which uses machine learning to automatically score each claim for fraud probability. Within 18 months, FPS had saved Anthem $56 million in recovered or avoided claim payments and lowered special investigation costs by 74%.
Insurers investing in AI fraud detection realize significant cost savings that ultimately translate to lower premiums industry-wide. The AI systems also improve fraud auditing and make evidence-gathering more efficient. This enables insurers to pursue recovery of illegitimate payments. Overall, AI radically advances insurers‘ capability to prevent and prosecute fraud.
AI-Powered Chatbots Are Transforming Customer Service
Handling high call volumes is hugely resource-intensive for health insurance customer service teams. AI chatbots offer an appealing solution by automating routine inquiries to self-service channels. From validating coverage to checking claims status and submitting payments, many customer needs are simple transactional interactions that chatbots can fulfill without human involvement.
For example, insurance startup Lemonade built an AI bot named Maya to handle customer service inquiries. Today over 70% of Lemonade‘s customer claims are settled entirely by Maya with no human adjusters necessary. This demonstrated the vast scope of insurance customer service that chatbots can fully automate with today‘s AI.
Chatbots like Maya use natural language processing to understand free-form customer questions and match them to the appropriate response or action from the insurer‘s knowledge base. Over time, continual learning improves the AI‘s conversational ability. Sophisticated bots can even ask clarifying follow-up questions if a customer‘s initial query is unclear.
According to a Bain & Company survey, customers today prefer AI over humans for simple inquiries. They appreciate the 24/7 availability and instant gratification. Freed from these mundane requests, human representatives can then focus on addressing higher-level, complex issues and building customer relationships.
So AI-powered chatbots make customer service far more efficient byautomating repetitive tasks. They reduce call volume to lower operational costs for insurers. And they deliver instant, personalized support that today‘s on-demand customers love.
AI Allows Customized Underwriting and Care Recommendations
In traditional underwriting, insurers assess broad risk factors like age, weight, smoking status to determine premiums. But AI now enables truly personalized underwriting and preventive recommendations tailored to an individual‘s health status and behaviors.
By integrating records from doctor visits, pharmacies, labs, hospitals and wearable devices, insurers can now build a 360-degree health profile of each customer. Advanced analytics applied to this wealth of data allows insurers to understand individual risks and needs with precision.
For example, Kaiser Permanente developed an analytics model that accurately predicts a person‘s risk of hospital admission in the next year based on their medical history. This allows customized outreach to higher risk individuals to proactively minimize complications of chronic conditions.
Meanwhile, Prevencio‘s HART platform parses a patient‘s clinical lab results, medical images, genomics, and EHR data to assess their risk of cardiovascular events. This allows timely preventive interventions only for patients with concerning early biomarkers.
The ability to tailor underwriting and recommendations to an individual‘s risks and needs makes prevention programs far more effective. For customers, AI enables insurance that functions as a personalized wellness coach rather than a vague bean counter. These innovations will continue revolutionizing how insurers engage customers for better health outcomes.
From spotting bogus claims to nudging individuals toward healthier lifestyles, Artificial Intelligence is driving transformation across the health insurance sector. Insurers are looking to AI to make processes more agile, efficient, and hyper-personalized. For consumers, it means fairer pricing, improved service, and guidance tailored uniquely to their needs.
As one insurance executive put it, "AI is enabling a paradigm shift. Insurance can now be preventive and personalized rather than reactive and general." By continually learning from burgeoning data sources, AI systems will extend this transformation into previously unimaginable realms. The future of health insurance will be truly data-driven.