Medical costs in Asia are continuing to rise, outpacing general inflation by four times.
According to the Mercer Marsh Benefits 2019 Medical Trends Around the World report, in 2018, Asia saw medical costs increase by an average of 10.4% - compared to the global average of 9.7%. In Malaysia, that figure rises to 13.4%.
Surveying 204 insurers across 59 countries, the report predicted a similar increase for 2019 - an increase of 10.3% (13.6% in Malaysia).
Hervé Balzano, Mercer Marsh Benefits International Leader, observed: "Rising medical costs show no signs of abating. Indeed, according to our research a majority of insurers globally now believe that in 2020 medical inflation will either remain constant or increase."
Globally, the top three health risk factors influencing employer sponsored group medical cost remain metabolic and cardiovascular risk, dietary risk and emotional or mental risk.
However, on a regional level, there is variation in the top risk factors.
- In Asia, environmental risks (52%) and occupational risk (52%) took prominent spots in the top three - just behind metabolic and cardiovascular risk (88%).
- In Latin America, dietary risk (85%) came in second behind metabolic and cardiovascular risk (97%), with emotional or mental risks (45) coming third.
- Over in Europe, the top three were metabolic and cardiovascular risk (92%), emotional or mental risks (61%), and dietary risk (51%).
- While in Middle East and Africa, occupational risks (59%), childhood and maternal under-nutrition (24%) took a more prominent spot.
Apart from that, the top three supplier-driven reasons for cost increases included: high cost pharmaceuticals and biologics (29%), new diagnostics and procedures (23%), and overprescribing of low-value health tests and procedures (18%).
The research noted that as the cost of health benefit programmes continues to rise globally, employers have the opportunity to contain cost through smarter plan design and employee access to quality-focused healthcare.
Here are four key things HR can do to achieve cost savings while ensuring access to good-quality healthcare for your employees:
- Pay for value: Review the plan design to ensure it incentivises the right behaviour and results.
- Drive to quality: This is about delivering the right care at the right time in the right setting. Although employers may not have the expertise to do this themselves, leveraging specialists who can (often virtually) help employees decide whether to go to the emergency room or a local provider rather than seek telemedicine or visit a centre of excellence with the most cost-effective care will be needed to improve quality and affordability.
- Personalise the experience: Employees expect personalisation and support anytime, and companies using a technology-enabled approach to achieve this a re having the greatest success in impacting well-being outcomes.
- Embrace disruption: Collaborate with insurers, employers and other internal stakeholders to drive change in the system. Increased adoption of clinical consultations is making healthcare (from physicians to mental health providers, to physical therapy) more accessible and affordable. Combine the roll-out of these virtual-care initiatives with active communication and engagement with employees.
Infographics / Mercer Marsh Benefits Photo / 123RF