Mutualism and the digital world: a revolution is urgently needed

Thursday, 04 May 2017

The digital world has brought disruption in a similar way to the impact of the invention of writing or the printing press. And we are only beginning to fully gauge this impact.

For those involved in developing the new digital economy, this high speed digitisation is an undeniable sign of progress. In the health sector, the consolidation of personal data on individuals is becoming a deciding factor for individual wellbeing. There is tremendous hope that healthcare will become mainly preventive, leading to more precise diagnostics and more effective early treatment that will bring about longer and healthier lives.

Digital technology is now also holding out the promise for direct democracy because of the horizontal interaction provided by new technologies that challenge the conventional intermediation models. By empowering the customer or member instead of the middleman, the digital revolution could call into question the very principles of the mutuals, such as the broad mutualisation of risk, the members’ freedom of expression and the democratic style of representation.

But we should be wary of embracing an overly virtuous vision that might overlook the inherent risks in venerating a sharing and cooperative society, whose profit-making and real sources of revenue are often hidden from the public, or a boundless digitisation that subjugates the masses, leaving them defenceless instead of serving their needs.

Here, the example of insurance is enlightening. The traditional asymmetric information which benefits the insured party is in the process of changing sides and will soon favour the insurer. The ability to control and cross-check data reinforces how we predict risk by insured categories or even on an individual basis. The move from the mutualisation of risk to the individualisation of risk is now upon us, leading to behavioural health insurance.

Is this paradigmatic shift desirable? It all depends on the guarantees put into place for the insured parties in exchange for the shared data. But let us suppose that only a promise made for truly useful services and that the data will be used in a transparent way that guarantees respect for privacy will convince the insured parties to enter into a different kind of relation with their insurer. Most importantly, these issues must be discussed with the insured parties and that is where mutualism can prove its worth.

Such an evolution must strike a good balance between the collective nature of insurance and private considerations. We cannot afford to lose sight of the collective challenge because man must be the end and not the means. Here again, mutualism must continue to play a major role because its values are as relevant as ever in this new digital society, even if the model has to be thoroughly reinvented.

Today, many people think that mutualism is a dusty and old-fashioned model. It is not easy to challenge some critics when almost everywhere technocrats are imposing prudential rules or when others seek to subjugate mutuals in a bid to return to an economic administration of healthcare. The danger threatening mutuals is confinement and institutionalisation which would stifle innovation. But we are at the end of an evolution and if mutuals wish to survive, they must be capable of self-disruption by reviewing their values, whilst not discarding them, in light of the revolution that is now underway. And they must take advantage of the huge potential of digital platforms to offer new services, give greater value to their membership and, in that way, forge a future for mutualism’s beautiful aspirations.

This article was written by Jean Louis Davet, Director General of the MGEN Group, France, and Board Director and Executive Committee Member for ICMIF. The article was first published in Les Echos on 18 November 2016 and is reproduced with the kind permission of Jean Louis Davet.

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