Asia Pacific medical costs and healthcare benefit costs will continue to rise, said WTW recently when releasing results of its Global Medical Trends Survey.
The average cost of medical care in the region jumped from 7.2% in 2022 to a high of 9.9% in 2023, WTW noted.
The insurer-reported cost trend for 2024 is projected to remain unchanged at 9.9%, the company said.
This is influenced by variations in markets around the region, with some showing little change, and others registering slight decreases or increases from 2023 to 2024, WTW observed.
In Singapore, the medical cost is expected to increase by 10.67% next year, the firm added.
“Global inflation, which was a significant factor in driving up healthcare costs, has moderated in 2023 is expected to continue to fall going into 2024,” said Eva Liu, Head of Strategic Development, Health & Benefits, Asia Pacific, WTW. “While cost increases are projected to ease in 2024, they remain largely elevated in most markets in APAC, including Philippines, Malaysia, India, Indonesia, South Korea, Singapore and Vietnam”
The overuse or misuse of care due to medical practitioners recommending too many services and the high cost of new medical technologies, ranging from artificial intelligence-powered diagnostics tools to gene therapy, remain as the leading external factors driving the persistent high trend, Liu pointed out.
Survey highlights
- According to insurers, the leading driver of Asia Pacific medical costs continues to be overuse of care (72%) due to medical professionals recommending too many services or overprescribing.
- Half of insurers (50%) also indicate that insured members’ poor health habits are among the top factors. The underuse or lack of preventive services (39%) and inadequate understanding by insured members on how to use their plans (23%) are the other cost drivers highlighted.
- In APAC, cardiovascular diseases and cancer continue to be the top two fastest-growing conditions by incidence of claims and costs.
- The survey also found mental and behavioural health disorders rank among the fastest-growing conditions by cost and claims over the next 18 months globally, except in APAC.
- Many organisations’ medical insurance programmes continue to exclude coverage for treatment of certain conditions, including mental and behavioural health such as anxiety and depression, for which treatments exist and despite a recognised need for care among the insured population.
“This could be due to the sociocultural stigmas around mental health that exist in many countries, including in Singapore, and coverage exclusions which may be in place,” said Audrey Tan, Head of Health & Benefits, Singapore, WTW.
However, these exclusions can significantly affect employee wellbeing and Diversity, Equity & Inclusion (DEI) efforts. Generally, insurers or even employers here still lag behind global players in making changes to medical portfolios in 2023, from wellbeing services or adding other DEI features in their programmes, Tan added.
“Faced with the prospect of higher cost increases over the next several years, employers need to focus their efforts on how to make their healthcare benefit programmes more cost effective,” Tan advised. “This can range from conducting a review to determine if coverage is the right fit for their organisations to formulating a wellbeing strategy and ensuring wellbeing benefits are accessible to all employees.
By understanding the factors that affect healthcare and drive costs in their populations, insurers and employers can develop strategies to combat the ever-present threat of rising costs in Singapore, she added
