Management gurus C.K. Prahalad and M.S. Krishnan lay out some striking examples of "new age innovation" in their upcoming book. None is more provocative--and potentially controversial--than one involving ICICI Prudential, which has introduced an insurance product in India whereby it charges diabetics based on their ongoing compliance with a personalized health regimen.

ICICI already does regular testing of policyholders' blood sugar levels and other vital stats, mostly at partner clinics. But that's just the start. Ultimately, it hopes to monitor customers' vitals in real time via remote diagnostics, tapping sensors built into individuals' wristwatches or other devices.

So say a blood sugar range of 80 to 120 is deemed optimal in order for a diabetic customer to have the best chance of avoiding costly medical complications. ICICI could adjust the customer's premium--say, every two weeks or every month--based on his or her variance with that range. Those customers consistently in the optimal range, based on the data fed regularly to the insurer, get the best rates. The further customers stray outside the range, the more they pay for their premiums, until at some point they’re considered too risky and are dropped by the insurer.

Such regular monitoring--coupled with recommendations from doctors, nutritionists, fitness specialists, and others in the ICICI network on how to adjust medication and exercise to improve policyholders' "performance"--could improve the quality (and extend the length) of people's lives. "The management of risk is a joint responsibility of the doctor, the insurance firm, and the patient," write Prahalad and Krishnan, who maintain that ICICI is providing a health product as much as an insurance product.

The authors point out that no one is obliged to sign up for such a product. If you're antsy about that level of oversight, go elsewhere for life insurance.

Still, for this kind of program to have any chance of flying in the U.S., providers would have to guarantee an iron-clad lock on the data, both in transit from customer to service provider and stored by the provider. The more paranoid among us can imagine "Do Not Insure" lists making the rounds, or insured diabetics getting harassed by every imaginable marketer in the diabetes-care industry.

The technical and logistical coordination necessary to make such a program work is mind boggling, involving not just insurance carriers, doctors, labs, and others in the health care supply chain, but also networking, device, information, and other IT providers. Mistakes in reporting and diagnosis are inevitable, as are security lapses. Are the insurance and care industries really up to this challenge?

As a lifelong diabetic myself, this level of monitoring isn't for me—but then again, I eschew modern insulin pumps for the old stick-a-needle-in-my-leg method. More important, what do YOU think as an observer of this kind of cutting-edge innovation? Does this concept intrigue you or give you pause? Comment below--but don’t just shoot from the hip. Bring some analysis to your argument.