Paying higher medical bills? Your staff might be to blame

Medical costs among firms are increasing and looks like the culprits might be none other than your staff.

A recent study by Willis Towers Watson indicated that 49% of the medical insurers expect medical cost to increase due to underuse of preventative services.

In addition, 43% expect increases due to overuse of care because of employees seeking inappropriate care.

This is because employees postponing care can result in more expensive and complex cases.

Of those surveyed, 56% of employees in Asia Pacific said they skip or change their medication, or delay or avoid a medical test or procedure prescribed by a doctor.

To avoid this situation, many leading employers are trying to establish a workplace culture of health by encouraging prevention and the promotion of healthy lifestyles.

"This approach requires employers to thoroughly understand their workforce’s health risks and design thoughtful benefit strategies that empower employees to find their own paths towards healthy living, along with their families and dependents, ” said Dr. Rajeshree Parekh, director of health and corporate wellness for Asia and Australasia at Willis Towers Watson.

Another reason for the rise in medical costs was due to external factors - such as medical practitioners, as in another survey by Willis Towers Watson, which drew on responses from 174 leading medical insurers, of which 45% are from Asia Pacific.

More than seven out of ten corporate medical insurers said the hike in medical costs is due to the overuse of care owing to medical practitioners recommending too many services, putting it the top reason for rise in medical cost in Asia Pacific.

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Medical insurers project the cost of health care benefits in Asia Pacific to increase by 8% in 2016 and the trend is expected to rise over the next three years.

The situation with medical professionals over-charging patients leading to rising medical bills is a serious problem in Hong Kong.

According to figures from the Office of the Commissioner of Insurance, the claimed amount for accident and health has ballooned from 4.4 billion Hong Kong dollar in 2010 to 6.1 billion in 2015, a 36% hike in five years.

Medical professionals were condemned for taking advantage of insurers, charging patients in accordance to their insurance package instead of the actual price.

In an interview with Singtao Daily, Francis Lui, economic professor at Hong Kong University of Science and Technology recalled his personal experience being over-charged for a a colon cancer inspection procedure at a private practice.

"The doctor asked for the claim ceiling of my medical insurance. I told him it was HK$27,000 and he charged the full claim amount even that procedure costs no more than $7000. This is a worrying trend which will lead to huge raise in insurance policies and putting more pressure on the government medical system," he said.

Looking at external factors driving medical costs, 81% of medical insurers surveyed in Asia Pacific say it is due to new medical technologies, 48% say it is owing to profit motives of providers, and 34% say it is due to changes in workforce demographics.

In Asia Pacific, from a supply side, the most common cost-sharing approach for medical products is an annual limit on out-of-pocket expenses, premium cost-sharing by employees and an annual deductible.

A deductible is the expense that needs to be paid out-of-pocket before the insurer will pay any expenses.

“Using coinsurance and deductibles as a plan design feature does more than just defray the amount of the deductible; it helps employees to become better consumers of health services if they must pay for a portion of their care. Coupled with direct education, these design features can be a powerful cost mitigation tool, and they’re being used by an increasing number of employers in Asia,” Dr. Pareekh stated.

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