Dave Goehrke:
Welcome to Munich Re Life US' podcasts on electronic health records. I'm your host, Dave Goehrke. In today's episode we'll give you a basic introduction to electronic health records, or what we call it for short, EHRs. We'll provide expert insight into how they are expected to create widespread value across the life insurance value chain and share an update on the Munich Re life US and Clareto partnership. To help me do this is Tim Morant, Chief Risk Assessment Officer at Munich Re Life US, and Dave Dorans, CEO at Clareto. Thanks, Tim and Dave, for joining me; how are you guys doing?

Dave Dorans:
Great, thanks for having us, Dave, we appreciate it.

Tim Morant:
Thanks, Dave, good to be here.

Dave Goehrke:
Let’s get rolling with the topic at hand. I suspect that most people know who Munich Re is; they've been leading the reinsurance market for the last 140 years. But Dave, tell us about Clareto.

Dave Dorans:
Clareto's actually a company that's been around since the year 2000 and operating under the brand name MedVirginia. We operate one of the largest health information exchanges in the country. We exchange over 300,000 patient records a day between doctors and hospitals to enable them to provide better patient care --to enable a better patient experience for their patients, so that they don't have to get the same tests done over and over again by one doctor on Monday, and another doctor on Thursday. And it also provides the opportunity to share information with public health officials. So, if we have a situation like our recent pandemic, having electronically available information to exchange in the healthcare space is a real benefit to the entire ecosystem. And starting in 2018, we really saw an opportunity to capitalize on the core infrastructure we had built, running that health information exchange to bring those tools to the insurance industry where a need for quick access to quality health information could provide real benefits.

Dave Goehrke:
That's really awesome. In terms of electronic health records, can you tell us Dave - what is an EHR?

Dave Dorans:
An EHR is essentially accessing a patient's medical records that are held on the computer systems inside the doctor's office or the hospital system. Anybody that's been to the doctor in the last few years knows, the days of the doctors scribbling on a yellow legal pad are over. Everything is entered into a computer, or it's entered into an iPad and they're clickety clacketing all the time. All of that information is being electronically held and retained. And we're tapping into those systems to get access to the patient's records. The beauty of that EHR record is that it can be delivered much more quickly than the traditional record. It's got a wealth of information about the patient, and it's also something that can be delivered in a structured format, so it's really conducive for some of the modern tools that are available to analyze that information and use it much more quickly.

Dave Goehrke:
That all makes a lot of sense; it sounds like they’re as modernized and efficient as they've ever been before, electronic health records.

Dave Dorans:
So, it's a wealth of information. One of the things that we've noticed is that these records can be -- you know comprehensive is good -- but they can also be really long. We've gotten records on patients routinely three, four, five hundred pages and over a thousand pages is not out of the question. I think I saw one last week that was 1,800 pages long, spread out over 100 documents, just on one patient.

Dave Goehrke:
I said efficient, maybe they're not always efficient.

Dave Goehrke:
That's great, well, as you said, the creation was really to address health care management and now we can have an opportunity to leverage it.

Dave Dorans:
‘We're leveraging’ is really a great way to look at it. None of these systems that we're talking about were built for the insurance industry. They were built for health care. They're being driven by needs in the healthcare industry. And what we're doing is finding a way that we can capitalize on the capabilities that they bring. And you know, as we talk about this, Tim, we think there are real opportunities to revolutionize the insurance industry by utilizing these tools.

Dave Goehrke:
Great, so EHRs in relation to Munich Re specifically, and just life insurance in general, how is this all connected Tim, from your perspective?

Tim Morant:
Sure, it has long been thought that EHRs would be able to revolutionize the insurance industry. You know, from an underwriting perspective, an EHR represents all the information needed to assess somebody's health, and so when the applicant comes in, this would be a huge benefit. Traditional underwriting has always relied on attending physician statements and paramedical examinations. You know EHR could replace both of those in an accelerated underwriting environment. You know this data could be pulled in automatically to both improve our risk assessment in these programs but also to increase the volume of good risks that we are able to select. We see other opportunities beyond underwriting, all the way through the value chain of insurance to the endpoint of claims adjudication. Speaking specifically of Munich Re, in 2022 we acquired Clareto because we see that the life insurance industry is really hitting an inflection point right in risk assessment in particular. New digital data is becoming available, and carriers throughout the industry are redesigning the way that they select risks and put policies on the books. EHRs are key to that revolution. We’re committed to developing the cutting-edge tools needed to plug EHRs directly into this whole process. We believe that EHRs are the future of insurance, we feel strongly that combining both Munich Re and Clareto will be able to bring value to our clients and allow them to grow their business in the most intelligent way.

Dave Goehrke:
Okay, so it just seems like there’s this kind of obvious natural benefit from EHRs. But it's also improving the customer experience.

Dave Dorans:
Absolutely, I mean you’re both improving your risk selection, but also decreasing turnaround time. So for the customer - the end buyer of the insurance- it's really an overall better experience for them.

Tim Morant:
Remember, when we say insurance lab, it sounds innocuous, but what that really means is a creepy guy pulling up to your house in an old station wagon and doing a blood draw in your living room. This is really a lot of fun for everybody, plus you get to use one of your vacation days for it.

So you know, really, one of the downsides of this is that we're going to cheat people out of that experience going forward.

Dave Goehrke:
Good news for us, bad news for creepy guys. Okay so it's a win, win. I'm an underwriter for those of you that don't know me. And you know we talk about attending physician statement all the time, it sounds like the same thing, but I get the feeling it's not quite the same thing. How are they different?

Dave Dorans:
It's not identical. So the attending physician statement, which is kind of been considered the gold standard in underwriting for the last 25 years, was effectively a photocopy of that old paper chart that the doctor kept on your behalf. And it would be, you know, a really long document. Getting them took a lot of time, it was not at all typical that a healthcare facility wouldn't even consider releasing the records until after they had already received their fee. So the process could take weeks or even months to get access to someone's chart, and even when it was delivered, again it was just in a paper format if you can believe it. It's still in this day and age delivered via fax machine. And who knew those even existed anymore? So it's great information, but it was delivered very slowly, it was expensive to get and it wasn't delivered in any kind of electronic format that would enable us to use modern tools to analyze the data, to put it through algorithms that could be read very, very quickly. So it was a very, very cumbersome process for all parties involved.

Dave Goehrke:
At a high level, it just seems like a no-brainer. This value would be so valuable for insurance companies and, based on what we've discussed so far, at least theoretically, easily accessible.

Dave Dorans:
Yeah, I mean, theoretically, it's easily accessible, and there's a learning curve, so certainly, as an industry, one of the things we think we believe with this combination of Clareto and Munich Re, we believe we have the ability to provide the tools to make this more usable. So this EHR is delivered in discreet sections, where the data is put into different sections for: what are your medical conditions? What medications are you taking? What are your lab results? But it's still fairly complicated, and it's new for underwriters; it's not exactly what they were used to. Sometimes, there's more information than we're used to getting; sometimes, there's pieces of information that are different. So we needed a new rule book, we needed a new playbook for the industry of how do I use this, compared to the tools that I used before? And the expertise that Munich Re Re brings in, actuarial science underwriting, risk assessment is going to be critical in turning this tool, you know the excitement of it into the reality of what it's going to take to actually use this.

Dave Goehrke:
So it's getting some traction. Tim, maybe you can expand a little bit on your thoughts from the Munich Re perspective. Why aren't carriers already using EHRs across the entire value chain?

Tim Morant:
I kind of see it as a twofold reason. So firstly, you know building out an EHR network requires getting medical providers comfortable, sharing the data in a new way. They also have to connect the data to the downstream systems. In early years, EHR data was only available for a small subset of the applicants. And the data was not particularly robust, big improvements have been made, and the availability and the robustness of the data have greatly improved. Secondly, while the electronic health records are in a digital format, they're not exactly in the kind of format that goes into underwriting rules. It wasn't developed that way. So you know part of the partnership, part of our commitment is to build out a way to parse this data so it goes directly into not only rules and engines, but to provide those tools directly to our clients.

Dave Goehrke:
Okay, so Clareto has obvious expertise that you've described Dave, and Tim Munich Re clearly from a risk selection perspective and digital perspective, we have a ton of expertise there. Can you talk a little bit right now on the work that Clareto and Munich Re have been doing?

Tim Morant:
Absolutely, it's exciting stuff. Since the acquisition, we've partnered with multiple of our carrier clients on various pilots and the pilots that we're doing today are very different than the pilots that have been done in the industry in the past. Historically, EHR pilots have been done with very small hit rates. They've been done where the real primary objective was to compare an EHR in the written format to the APS. The work that we're doing does that at a much larger scale. But it also focuses really on this parsing of the data, and digitizing into rules that can be applied in the current environment of underwriting, which is increasingly accelerated underwriting with digital means.

Dave Dorans:
If you look at phase one of this initiative from the Clareto perspective, it was really all about getting data, building out that network. Building out literally thousands of connections to healthcare systems. To all of these things, but once we delivered the records to clients, we realized we really didn't have the tools to help them figure out what to do with that record. How do I introduce this into my existing process? And that's where we're so excited about the core capabilities that Tim's discussing that Munich Re brings to the table. To just complete that circle, and make this from something that seems really cool, to something that's something that you can actually use in your business to transform your processes.

Tim Morant:
Likewise, we've always known that EHRs were going to be the solution, and knowing that we have the risk expertise, would jump to the chance to be able to partner and acquire Clareto because it allows us to actively participate in this next stage, this phase two, exciting phase in the industry.

Dave Goehrke:
We've kind of mentioned hit rates here and there. I'm going to get to that, and before I get to that, you also mentioned, Tim, you were talking about pilots and maybe traditional pilots, the way we Munich Re was doing pilots. And I know you've some thoughts on this Dave. To me, I think it's almost like comparing an apple to an orange. When you've been doing EHR to an APS to some degree. What's your kind of view of pilots and how they've been done in the past, and where the companies might be barking up the wrong tree?

Dave Dorans:
I think to your point and Tim mentioned this earlier, you know a lot of times the pilots that were done were a very limited number of cases. They'd run 50 cases; they'd have the underwriter look at the new electronic record they got versus the paper record that they had gotten before. There was a tremendous amount of subjectivity from underwriter A to underwriter B about whether that information was good enough or not good enough. And then the pilot would finish, and it was kind of a, ‘what do we do now?’ phase.

Dave Goehrke:
No conclusion.

Dave Dorans:
You know, we don't really know what to do, we don't know how to do this, and it's not because people aren't trying hard. It's not because they're not committed, it's because this is really, really difficult stuff. This is very, very complex, and that's why it takes the bandwidth of an organization like Munich Re and the skillsets to really bring this to fruition. And we're not promising people that we're going to snap our fingers and there's a silver bullet; this is going to be solved tomorrow. This is a long haul, and we're committed to the long haul, to making this work.

Dave Goehrke:
Let's get to hit rates now. Everyone wants to hear about hit rates. Why is it such an important metric for carriers that are considering adopting EHRs. Talk a little bit like, you know where they've been, where they are today, and where you see them going?

Dave Dorans:
So you know as we mentioned is an entirely new tool for carriers. So they're having to figure out how to incorporate this into their processes. How to change, how to train their people, how to work through the change management process and do something entirely new. And the reality is, when we started building these networks out, you know, we joked, when we first started Clareto and started getting people to participate in this insurance use case, we went out and got our first data source signed up. And then we would go to companies and every company would say, how many data sources do you have? And every data source would say, how many companies do you have? And when we signed that first client up someone in our organization joked it was like we had built the first telephone. It was like, well who do we call? Well, we have to wait till someone else gets a telephone so we can call them.

Dave Dorans:
So building the network took time and it was a brick-by-brick approach. So early on, hit rates were so low, five percent, six percent, seven percent, that it wasn't really worth it for a company to make that investment that we discussed. About building out processes and all that change management to make this work. Now we're at a point where we have access to data on over 200 million lives. We're seeing hit rates at 50% and increasing every single month. We have the largest data network in the industry of all of our competitors. But we're really excited that at hit rates of 50% or more, all of the benefits that we talked about are worth it, and partly, we need to remind people that, you know, when hit rates were too low, we understood that it didn't make sense to participate. But when you're talking about the hit rates we're at now, there's no need to wait for the hit rate to be 80, 90, 100%. They're tremendous value you can get on 50% of your business. Certainly makes it worth it for clients to jump in now.

Dave Goehrke:
So a lot of progress but a lot of work to be done still and Munich Re, of course we invested by acquiring Clareto. But we continue to invest but I think your staff is double, more - triple?

Dave Dorans:
Our staff has more than tripled since our acquisition in nine months, we've more than tripled the size of the staff just within Clareto. And Tim, I know you've added a lot of staff on the Munich Re side as well.

Tim Morant:
We have significant resources being allocated to all the work that we're doing here, so yes, absolutely.

Dave Goehrke:
And it goes to your earlier point about, just like ‘okay now what?’ And it's not easy, so it takes this massive investment and massive commitment to get it to where we want it to be.

Dave Dorans:
And understanding that was why, as Clareto, why we were so excited to look for a parent like Munich Re. Because we knew that was someone that brought the tools that could actually help us push this over the finish line to recognize and really, really fully utilize this exciting new tool.

Dave Goehrke:
So it's a big investment, but obviously well worth the investment. I love hearing the passion from both of you. So, Tim, in terms of the opportunities that this is going to present for risk assessment, underwriting and other business processes for yourself looking forward?

Tim Morant:
Absolutely, I mean we're just beginning this journey. We're making substantial investment like we just discussed, and you know as we grow the teams devoted to this, we're learning a lot of things. We’re building out, as we've said, new tools that make EHRs easier to be plugged into automated decisions, to improve the workflow efficiencies and underwriting programs -- applying natural language processing, to clinical tag and extract information relevant to the risk assessment. Developing medical summaries that include timelines and trends and key impairments, procedures and medical, medication that's been prescribed. And identifying risk factors that can flow directly into the rules and models. It’s very exciting.

Dave Goehrke:
So I see we're looking forward now, which is really good in this conversation and Dave, I know you just spoke about EHRs, the practicality and the acquisition, the ability to acquire those over the next five years or so. But I want to hear a little bit more about your thoughts on where we will be, as an industry, with EHRs in the next five years.

Dave Dorans:
Well, moving forward, there's going to be progress, not just from the tools that we talked about, but there's significant progress being made in the healthcare industry around increasing interoperability. Making records available, and that's partly technology, it's partly the federal government actually putting mandates into healthcare organizations that they need to share this data. There's an increasing recognition that the doctors don't own these records, the hospitals don't own these records. The patient owns the record, and if the patient wants this record to be shared so that they can access insurance products then it needs to be shared. So we think there's going to be significant progress, both in the health care industry, in making these records available, in making the data quality higher, accessibility higher, the speed faster. And then as Tim has talked about, the tools that we're going to have on our side to process those can fundamentally change this process. People are not interested in this day and age in a process that takes six to eight weeks to buy a product. We need to transform this to a point where it's frictionless for the client. It doesn't require a lot of effort on their part, and we can deliver an answer to them in days, you know within the next year or two. And then we'll ultimately get to a point where we're providing that answer in minutes.

Tim Morant:
Exactly, and you think about the use of EHRs in the underwriting process, you know as we go forward with everything you've just described, the data quality's going to improve. The hit rates are going to improve, so that turnaround time is going to decrease. The cost is going to decrease, it's going to be an overall much better experience for the end user. And we continue to develop all the digital tools to make that possible, without this partnership. It would be a very difficult effort to make that possible.

Dave Goehrke:
Dave, life insurance, obviously insurance in general, is heavily, heavily regulated. Some of what you were saying, it sounds like trying electronic health records are subject to a ton of regulation -- obviously it's a lot of personal information. So we don't control all of it, right?

Dave Dorans:
No, we don't control all of it, but the good news is, we really believe with these electronic health records, that we are swimming with the tide, not against the tide. We're doing things that the regulators actually approve of. There's a long history of insurers using people's medical information to underwrite them for risks that are insurance-related. We are getting permission from the client to use those records and regulators look at this line of business, and this acquisition, they actually like this because they don't get really scared when we start talking about things like, we're going to use people's credit card purchases, or we're going to use their other risk scores, or we're going to take these other factors that might be discriminatory in their nature. The medical information is fair game; we're not discriminating. Access to more information levels the playing field for everybody and puts us on a really good footing with regulators.

Dave Goehrke:
Great, so progress is incremental. You're not going up and down, up and down. It seems like it's steadily going.

Dave Dorans:
It's been a steady increase, our access to data has gone up every single month since 2018.

Dave Goehrke:
This is great. We've covered a lot, but I think we have just about reached our time. Tim and Dave, before we conclude, do you have any last thoughts, Dave, that you'd like to share?

Dave Dorans:
Just, the level of excitement we have. We've always been excited at Clareto about bringing these new tools to the insurance industry. But this partnership with Munich Re and all of the resources that it brings to bear is a complete game changer in terms of our ability to deliver these cutting-end solutions to the marketplace. And we just couldn't be more excited; the next couple of years are going to be fantastic.

Dave Goehrke:
Great, thanks. How about you Tim, any final thoughts?

Tim Morant:
Yeah, I couldn't agree more. I echo everything that Dave has said. As the industry continues to evolve and digitize, electronic health records are going to be central to everything that we're going to be doing. As part of our commitment to our clients and to the industry, it's our goal to provide our insurance partners with the entire set of solutions they need in order to assess these risks and use EHRs in a manner that is really going to allow us to get to where this future state looks. We look forward to leveraging our partnership together, and it's very exciting.

Dave Goehrke:
Great, I want to thank you both for being here today. This is really, really exciting, and there's a lot of solutions out there, it looks like. And I can't wait to see the progress that gets made in the coming months between Clareto and Munich RE.

Tim Morant:
Likewise.

Dave Dorans:
Thanks Dave.

Dave Goehrke:
Thanks, and thanks everyone for listening.