Cost of global healthcare benefits continues to rise, Willis Towers Watson survey finds

A survey of medical insurers by Willis Towers Watson has found that the cost of employer-provided healthcare benefits globally continues to climb, with little relief in sight. Costs are being driven up by the overuse and overprescribing of services, advanced medical technology, and the cost of hospital/inpatient and outpatient medical services, according to insurers. The 2017 Willis Towers Watson Global Medical Trends survey found that medical insurers globally are projecting the cost of healthcare benefits to rise 7.8% in 2017, an increase from 7.3% in 2016. Larger cost increases are projected in nearly all major regions, with the biggest increases expected in Latin America (11.5%), driven by very high rates of inflation in some countries. Large increases (9.8%) are also projected for the Middle East and Africa region. Europe (4.5%) continues to show the lowest level of increase, while US insurers expect a 7.5% increase this year, slightly less than experienced in 2016. Looking ahead, the survey found that the outlook for reining in costs in the near term is not optimistic. A majority of insurers in all regions except the Middle East and Africa expect higher or significantly higher medical trend costs during the next three years. “Controlling rising medical costs is without question a top priority for insurers and employers around the world,” said Cecil Hemingway, co-head of health and benefits, Willis Towers Watson. “While progress is being made in some regions to stem costs, the vast majority of respondents continue to grapple with how to rein them in. And it’s not for a lack of effort or innovation. In fact, more employers are implementing both traditional and innovative approaches to managing rising costs.” The main factors driving costs outside the control of employers and vendors are the high cost of medical technology (cited by 63%), followed by providers’ profit motives (40%). Nearly three quarters (74%) of insurers ranked overuse of care due to medical practitioners recommending too many services as the most significant factor driving costs related to employee and provider behaviour. More than half (54%) cited overuse of care due to employees seeking inappropriate care. According to the survey, increasing numbers of employers are offering preventive care and empowering employees to take responsibility for their own health. Globally, four in ten respondents (39%) offer wellbeing programmes. In the US, three quarters now offer such programmes, while just about half of insurers in Europe offer them. “Wellbeing initiatives hold great promise for addressing non-communicable diseases, as well as ones that arise from lifestyle choices such as smoking, poor eating habits and lack of regular exercise. While respondents’ health promotion programmes continue to grow globally, we believe insurers can work more closely with employers to better understand employee population health risks and employees’ preferred ways of using them, while providing enhanced metrics and standardised reporting,” said Francis Coleman, head of health and benefits, global services and solutions, Willis Towers Watson. Insurers worldwide report cancer (75%), cardiovascular disease (67%) and respiratory illness (40%) as the top three diseases. With concerns about employee stress continuing to rise, 61% of insurers globally now include treatment for mental health and stress in their standard medical insurance programmes. The survey was conducted between October and November 2016, and reflects responses from 213 leading medical insurers operating in 79 countries.

Cost of global healthcare benefits continues to rise, Willis Towers Watson survey finds

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