June 20, 2018

United Kingdom, London

  • Global medical costs increased on average 9.5% in 2017, almost 3 times the estimated inflation rate
  • Mental health is now the 3rd highest risk factor influencing group medical costs
  • Investing in data analytics and adopting a whole system approach to wellbeing will help employers, employees and insurers to manage cost and improve health outcomes

Adopting integrated health and wellbeing strategies underpinned by stronger digital and data capabilities will be a critical factor in managing the rising costs of workforce health benefit programs. The advice comes as new research by Mercer Marsh Benefits, Marsh & McLennan Companies’ international employee benefits business, shows that medical costs of private plans are increasing at almost three times inflation in most major economies.

Mercer Marsh Benefits’ 2018 Medical Trends Around the World surveyed 225 insurers across 62 countries. The survey indicates that employers have an opportunity to better manage healthcare costs and improve outcomes for their people. According to insurers, only 14% of companies are offering to a very large extent preventive lifestyle programs for staff. While mental health is now cited as the third highest risk factor, employers are not responding effectively with close to 40% of insurers indicating that employer medical plans provide no access to personal counselling. Employers are encouraged to adopt a whole system approach to wellbeing, in which mental health is recognized alongside physical health, as one of the essential building blocks to help employees fulfil their potential.  Furthermore, given the expectations of today’s workforce for a seamless consumer-grade digital experience, employers and insurers will need to invest in digital and data capabilities with 1 in 6 insurers currently providing no digital claim capability today.

John Deegan, Senior Partner, Mercer Marsh Benefits said, “As health care costs become more material (outside the US), employers are questioning the intent and design of programs. Given the digital health revolution underway, we are seeing progressive employers redefine health and benefit principles and question traditional medical insurance designs, many of which were based on receiving crisis treatment in a hospital setting.  And while it originated in the US, the rapid evolution towards value-based care where providers are paid based on outcomes instead of fee-for-service, demands innovation from the insurance community.”

“Health insurance is set for significant changes that will benefit clients,” said Andrew Perry, Managing Director, Mercer Marsh Benefits. “The Medical Trends Around the World research validates our thinking that there is a race within the insurer community to collect and use patient data more effectively. If progress is made in this area, it will help companies better address the needs of their employees and achieve the larger goal of a more affordable, quality-focused healthcare system for all.”

To download a copy the report, please click here.



Notes to Editors

The report asked insurers for information on the rising cost of medical care compared to inflation in each market as well as the types, costs and frequency of medical conditions that were claimed for by company employees in 2017. As Mercer’s research parameters for the two reports are different, US data has been excluded from this release; however according to Mercer’s National Survey of Employer-Sponsored Health Plans 2017, US employers experienced a 2.6% increase in the average total health benefit cost per employee in 2017.  

About Mercer Marsh Benefits

Mercer Marsh Benefits provides clients with a single source for managing the costs, people risks and complexities of employee benefits. The network is a combination of Mercer and Marsh local offices around the world, plus country correspondents who have been selected based on specific criteria. Our benefits professionals located in 135 countries and servicing clients in more than 150 countries, are deeply knowledgeable about their local markets. Through our locally established businesses, we have a unique common platform which allows us to serve clients with global consistency and locally unique solutions. Mercer and Marsh are two of the Marsh & McLennan Companies, together with Guy Carpenter and Oliver Wyman.