Singapore:
Malaysia and India, among Asia-Pacific markets,will see higher Employer-sponsored health care benefit costs in 2020.
According to a survey of medical insurers by Willis Towers WatsonWTW), though Employer-sponsored health care benefit costs are expected to grow at the same rate as last year in Asia Pacific at 7.1 per cent in 2020,some markets including China, Hong Kong, India, Indonesia, Malaysia and Singapore will exceed the average expected increase at 9.8 per cent, 8.3 per cent, 12per cent, 11 per cent, 12.6 per cent and 9.3 per cent respectively.
On the Indian scenario, WTW survey has said medical cost are impacted by the failure to adopt a preventive approach to healthcare coupled with a delay in seeking care but there are other factors at work.
“Expensive chronic ailments and life style related disorder are still top the health care utilization chart with an increase in medical practioner recommending advanced medical procedure and treatment pushing treatment inflation higher.Insurers are attempting to build undermining discipline but persisting of medical policies is artificially depressing the health insurance premium. This will remain a concern,'' said the survey. .
The 2020 Global Medical Trends Survey, the largest of its kind in the industry, found medical insurers globally are projecting health care benefit costs to continue to rise across the world this year. In Asia Pacific, over one-third (35 per cent) of the insurers expect that medical cost will continue to increase in the next three years.
“Controlling rising health care benefit costs remains a top priority for medical insurers and employers. Despite the regional variation in cost increases, they continue to outpace inflation and remain unsustainable, so neither insurers nor employers should be complacent,” said Cedric Luah, Head of Health and Benefits, Asia and Australasia at Willis Towers Watson. “
“The recent and on-going healthcare emergency caused by the COVID-19 also highlights the need to review how employers manage and deliver health care benefits, not only in normal times, but also during crisis period like this. While the impact on medical cost is still unknown for now, it is expected that cost will escalate this year. The renewed interest on telemedicine, extended medical leave and so on will potentially have an impact on cost and expenditure too.
Therefore, it is important take a closer look at the factors driving up costs, and work out the cost containment measures, as well as contingency plans, as the outbreak continues,” added Cedric.
When asked for the most significant cost-driving factors based on employee and provider behaviour, almost nine in 10 respondents (86%) cited the overuse of care by medical practitioners recommending too many services as the leading driver. At the same time 67 per cent saw insured members overusing care which placed this as the second condition that pushed up costs.
When asked about external factors (out of the control of both employees and providers), the high cost of new medical technology (71 per cent), followed by providers’ profit motives (52 per cent) once again emerged as the top two leading driver of medical costs. Both figures represent an increase from last year (60 per cent and 37 per cent respectively).
According to the survey, cancer (86 per cent) and cardiovascular diseases (48 per cent) will remain the top two conditions by cost and are expected to remain so in the near future. In addition, 60 per cent of insurers are seeing an increase in incidences of gastrointestinal disorders.
Mental health, a “sleeper condition” where rates are quietly but steadily increasing.
The survey also found mental health conditions are expected to become of the most significant cost factors over the next five years. Two-thirds (66 per cent) of insurers expect that behavioural and mental health conditions will become one of the most costly medical conditions and form the bulk of medical expenses other than hospital and inpatient care in the next five years.
The potential impact of mental health conditions is getting the attention of insurers and employers all around the globe. While many insurers in Asia Pacific expect mental health disorders to become more prevalent in the next three years, about 50 per cent are currently excluding them from standard medical insurance policy.
“Insurers in all regions are anticipating an increase in the demand for mental health services, and this will undoubtedly place upward pressure on costs and challenges to existing health care models. Employers should therefore move their focus beyond programmes to broader organisation factors that play a critical role in supporting mental and emotional wellbeing,” said Cedric.