Medical costs in Asia Pacific are forecasted to increase from 8.6% in 2019 to 8.7% in 2020, said Aon recently.
In its 2020 Global Medical Trend Rates Report, the company points out that employer-provided medical benefit costs in Singapore will rise by 10% in 2020, outpacing average general inflation of 1.4%.
This is due to a combination of factors such as an ageing population and a rise in chronic diseases including diabetes and high blood pressure, Con explained.
Projected medical trend rates vary significantly by location.
In Asia, costs are expected to increase the most in Malaysia and Thailand, with average medical trend rates forecasted at 14 percent and 13.9 percent respectively, Aon said.
In contrast, China and Hong Kong are projected to see an average medical trend rate increase of 7.5% and 8.1% respectively, the firm added.
Due to the adoption of advanced technology, the prices of medical goods and services are increasing at a level two to three times of general inflation, Aon observed.
The penetration of mobile applications for online claims management has also contributed to the increase in claims reported by supplemental medical plans in China, the company added.
In Hong Kong, the medical trend rate is driven by increasing levels of stress and respiratory infections, Aon said.
According to the report, there’s an increasing impact of non-communicable diseases on health care costs globally.
In Asia Pacific, cardiovascular, cancer, musculoskeletal, ENT and gastrointestinal were the most prevalent health conditions driving health care claims, Aon said.
Aon’s report also states that the growing prevalence of risks in Asia Pacific is due to high blood pressure, obesity and ageing and unhealthy personal habits such as physical inactivity and bad nutrition.
"Many of the risk factors lead to chronic conditions with long-term medical costs that make them difficult to treat and result in long-term medical cost increases,” said Tim Nimmer, Aon’s global chief actuary for Health Solutions. “As a large portion of our waking hours are spent on the job, the workplace is a logical place to create a healthier culture and change behaviours.”