Specifically in Malaysia, healthcare spend for employers is expected to go up from 11.6% to 12.6% in 2020.
This data comes from the just-released 2020 Global Medical Trends Survey by Willis Towers Watson, which found that overall China, Hong Kong, India, Indonesia, Malaysia and Singapore will exceed the average global expected increase at 9.8%, 8.3%, 12%, 11%, 12.6% and 9.3% respectively.
Global medical trends: Healthcare benefit cost growth, 2018 – 2020
Trend 1: Where is all the healthcare money going into?So where is all this money going into? 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.
Trend 2: The rise of mental health, a “sleeper condition”Rates in mental health are quietly but steadily increasing, and the study finds mental health conditions are expected to become of the most significant cost factors over the next five years.
Two-thirds (66%) 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.
However, despite the expected increase in such issues, about 50% of insurers in APAC 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,” said Cedric Luah, Head of Health and Benefits, Asia and Australasia at Willis Towers Watson.
Trend 3: Healthcare benefits in times of crisisCedric Luah explained: “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."
Trend 4: Be careful before translating local experience into regional realityOne of the problems with taking averages for a region is that individual stories can be obscured or overlooked. In Europe, where the rates of increase are predicted to remain slight (from 4.2% to 4.3%), Hungary and Turkey are significantly higher at 9.6% and 19.2%, respectively. Both countries have a decaying public system, and private provision is being used by citizens who have grown exasperated with waiting times and inefficiency.
Similarly, national averages can distort the international picture through developments in a comparatively small number of countries. An increase of 60% is projected in Zimbabwe, a rise of 10% over last year and 35% on 2018. This was repeated elsewhere, if less dramatically. In Zambia, there is projected to be a 5% increase to 25% in 2020, and in Cote d’Ivoire there will be a rise to 13.3%. Both Congo and Chad will see a rise to 15%.
Trend 5: Technology has its priceAsked which external factors were driving the increase in medical costs, 70% of insurers identified new technology as being responsible. This largely replicates 2019’s previous results and speaks to insurers’ darkest fears that the conditions covered by their policies can be treated more effectively with new technology but that this treatment is more expensive.
Trend 6: The most common exclusions in healthcare policiesThe most common policy exclusions are for alcohol and drug use, and HIV/AIDS. There continue to be significant gaps in coverage for these conditions.
There is a clear global trend for group policies covering less than 50 employees to exclude people with preexisting conditions — 50%, falling to 32% when the group policy covers up to 500 employees. But when it comes to alcoholism and drug use as well as HIV/AIDS, there is much more unanimity.
For group policies of different sizes, between 49% and 53% exclude on the basis of alcoholism and drug use, and between 47% to 50% exclude on the basis of HIV/AIDS.
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