Employers in markets including China, Hong Kong, India, Indonesia, Malaysia and Singapore should brace themselves to exceed the average expected increase of health care benefit costs in 2020, experts warn.
Employer-sponsored health care benefit costs are expected to grow at the same rate as last year in Asia Pacific at 7.1% in 2020, according to a survey of medical insurers by Willis Towers Watson
However, some markets including China, Hong Kong, India, Indonesia, Malaysia and Singapore will exceed the average expected increase at 9.8%, 8.3%, 12%, 11%, 12.6% and 9.3% respectively.
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%) of the insurers expect that medical cost will continue to increase in the next three years.
”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,” said Cedric Luah, head of health and benefits, Asia and Australasia at Willis Towers Watson
”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 Luah.
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% 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%), followed by providers’ profit motives (52%) once again emerged as the top two leading driver of medical costs. Both figures represent an increase from last year (60% and 37% respectively).
According to the survey, cancer (86%) and cardiovascular diseases (48%) will remain the top two conditions by cost and are expected to remain so in the near future. In addition, 60% of insurers are seeing an increase in incidences of gastrointestinal disorders.