First published in Insurance Day.
Advances in prosthetics and bionics are changing the landscape for amputation claims – so much so that the near future is likely to see this technology shift into what might be considered the realm of science fiction, with artificial limbs being connected directly to people's nervous systems. This technological leap has profound implications for the insurance industry. Insurers have faced spiralling costs for prosthetics in recent years, without resultant decreases in care costs and associated future losses. This imbalance looks set to change.
According to NHS England, the total number of patients with an amputation or congenital limb deficiency attending specialist rehabilitation service centres in the UK is estimated at 55,000–60,000. Globally, the market for prosthetics reached $1.9bn in 2016 and, over the next decade, is set to increase to above $3bn. Growth is being driven by a range of factors including global increases in the number of amputation cases and government funding initiatives.
The armed forces also play a central role in these advances. Prolonged conflicts such as Iraq and Afghanistan have generated large cohorts of amputees. This trend can be traced back to the US Civil War: in 1866, one-fifth of Mississippi's entire budget was spent on prosthetic limbs for returning Confederate Army veterans.
This increase in demand for prosthetics has led to faster product development at escalating cost. In the past five years, the focus of bionic technology – technology relating to electro-mechanical body parts – has transferred from knee to ankle joints, thus doubling the functionality of prosthetic lower limbs. Consequently, costs for a combined knee-and-ankle prosthesis over a six-year life span have risen as high as £120,000. This is a significant jump from ten years ago, when more basic limbs cost around £25,000 over five years.
Lower limb costs may have risen but so too has their functionality. An amputee can now use a single prosthetic knee for multiple activities: walking, cycling, locked standing, and a variable specialist activity such as playing table tennis. This allows insurers to challenge the need for multiple limbs, with associated cost reduction. These developments are good news from a clinical standpoint, plus they also have a positive impact on levels of amenity, which pays dividends for both claimants and insurers in relation to future losses.
Osseointegration
The way in which prosthetic limbs are connected to the human body is also being enhanced. Osseointegration – the direct connection between living bone and the surface of an implant – is back in vogue in the UK. This technology was first considered in the 1990s and has returned to favour, particularly with veterans and more active users, who benefit from much improved functionality. It allows for heavier and more robust technology to be used without the limb abrasion usually associated with a traditional socket-connected prosthesis. 2018 may well prove to be the tipping point for this technology, which is set to give users such improved functionality that care needs and loss of earnings will be reduced. This will, hopefully, lead to reductions in claim costs.
Osseointegrations have also reduced fitting and associated care costs. The need for continual limb seating assessments and socket-fitting reviews has been removed. For younger claimants, osseointegration can be the most cost-efficient option because sockets no longer need to be replaced, although components do require renewing over the user's lifetime. The need for bespoke components designed for the individual wearer does makes osseointegration expensive, but the increased sophistication of 3D printing should reduce unit cost over time.
Presently, there are no studies that demonstrate to insurers with absolute certainty whether this technology will work over a claimant's lifetime. Manufacturers argue that advanced prosthetics utilising osseointegration allow for a safer user, with improved stability and reduced wear and tear on the body. This, in turn, alleviates some of the need for care in later life. The challenge for insurers is that manufacturers' claims can be hard to assess, given the absence of long-term studies. Realistically, a test period of 20 years is needed to do this.
The possibility is that manufacturers' safety benefits are being overstated. Should insurers agree to fund this developing technology, they will bear the risk of these products failing during the life cycle. In addition, short product life cycles that render prosthetics obsolete after a few years have been a historic problem. However, the technology appears to be sufficiently mature for this to be less of an issue, which creates the opportunity for insurer-led trials.
Some rehabilitation organisations, like PACE Rehabilitation, carry out their own clinical trials, robustly testing the efficacy of products. A clinical approach, combining occupational and physical therapy from the outset, allows the most effective treatment to be given to claimants when they need it most. This will allow future rehabilitation and care needs to be mitigated most effectively.
Arguing the case
Insurers are starting to fund more advanced prosthetics because of the potential for claims reduction in other areas. However, the risk remains that claimant solicitors will find favourable experts to justify claiming for more expensive prosthetics, irrespective of whether this option is right for the claimant given their age and lifestyle.
In such circumstances, insurers may argue that existing cheaper technology that offers similar functionality is reasonable for a particular claimant. Existing case law shows that courts will not consider cheaper alternatives suggested by defendants if the item claimed by the injured party is deemed reasonable. The legal burden, therefore, is on the claimant to prove what is reasonable for their needs. A claimant is likely to overcome this burden if he or she is presently using the prosthesis and it is already built into their care and rehabilitation package. Although the burden of proof should be on the claimant to prove that their choice is reasonable, in practice it appears to be the defendant and their insurer who are required to prove that a claimant's claim is unreasonable.
Insurers need to be aware of the implications of this new world and how they approach claims and evidence gathering. The danger that a claimant's post-settlement behaviour will not reflect what is shown in a schedule is still very real. In some cases, there could be a conflict of interest if rehabilitation providers are also the claimant's chosen expert. Insurers need to be aware of when to challenge the reasonableness of these claims. They must also develop a full understanding for which claimants this emerging technology will be most appropriate.
These advances impact on three interdependent heads of loss; prosthetics, accommodation and care. Where top-end prosthetics are sought by a claimant, reciprocal reductions in both accommodation and care needs should be argued for. For example, it is open to insurers to contend for a reduction in the care element of the claim as it can be argued that by using this prosthesis, the claimant can be more capable of living independently.
Neural implants are an exciting area to watch for the future. This technology exists, although it is not yet commercially available. Reminiscent of Luke Skywalker's artificial hand, electrodes in a bionic hand link to the nerve endings in the arm. This means that, for the first time, the brain can communicate directly with the prosthesis. Costs escalation will naturally be seen with this technology, particularly while in its infancy, although 3D printing is likely to reduce prototype costs. However, once prosthetics can be connected to the bone and nervous system, this will improve functionality markedly, thereby reducing other losses. In time, advances are likely to ensure prosthetics are able to equal – and, perhaps, be even better – than the human limbs they replace.
For insurers, the ability to play an active part in this developing market now will generate significant benefits. The greater that involvement, the more fully insurers will be able to understand this technology while encouraging rehabilitation professionals to promote it in the right cases. Without this important developmental knowledge, the danger is that products will become obsolete quickly, leaving insurers funding a white elephant. Additionally, it is hoped that in the near future, historic difficulties with insurers running their own clinical studies due to the short product life cycle will grow less acute. This is an attractive proposition for insurers, allowing them to assess risk and mitigate future losses as never before.
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