MMB survey finds rising medical costs drive innovation in employer-sponsored health plans

MMB survey finds rising medical costs drive innovation in employer-sponsored health plans

Rising medical costs in Singapore drive innovation in employer-sponsored health plans according to MMB study

  • June 10, 2019
  • Singapore,
  • Singapore’s medical trend rate of 10.0% outpaced economic inflation ten-fold in 2018
  • Top three drivers of medical claims (based on dollar amount) are cancer, diseases of the circulatory system, and gastrointestinal diseases
  • Metabolic and cardiovascular, occupational, environmental, dietary and emotional/mental risks continue to contribute to declining health
  • Insurers respond with investments in quality-focused healthcare solutions and programmes
  • 78% of insurers globally support or consider supporting virtual health consultations to manage member health and contain cost

According to the Mercer Marsh Benefits (MMB) 2019 Medical Trends Around the World report, Singapore’s medical trend rate of 10.0% outpaced economic inflation ten-fold in 2018, and is expected to rise by 0.1% in 2019. Insurers are generally predicting further increases on the horizon in 2020. As the cost of health benefit programmes continues to rise in Singapore, employers have the opportunity to contain cost through smarter plan design and employee access to quality-focused healthcare.

In its fifth year, this latest report surveyed 204 insurers across 59 countries*, assessing how health conditions, supplier factors and consumer habits are driving cost, as well as providing insights into how insurers are responding.

Globally, the top three health risk factors influencing medical cost remain metabolic and cardiovascular risk, dietary risk and emotional/mental risk. On a regional level, there is variation in the top risk factors (see also Table 1):

  • Asia: environmental risks (52%) as the effects of high pollution levels in many of the region’s major cities take their toll
  • Latin America: dietary risk (85%)
  • Europe: emotional or mental risks (61%)
  • Middle East and Africa: occupational risks (59%), childhood and maternal under-nutrition (24%)

In response, the number of insurers investing in initiatives to enable quality-focused care, to better guide members to the right care options for them more quickly, has more than doubled. Globally, 29% now name this type of investment as a top strategic priority. Insurers are responding by helping members make smarter healthcare choices with 63% of insurers providing education, tools and incentives to drive positive behaviour. The Middle East and Africa had the highest rate of adoption of programmes of this type, with 71% of insurers proactively using such consumer-focused tactics with plan members. Globally, 78% are now considering or already support virtual health consultations.

Hervé Balzano, Mercer Marsh Benefits International Leader, observed: “Rising medical costs show no signs of abating. Indeed, according to our research a majority of insurers globally now believe that in 2020 medical inflation will either remain constant or increase.

“The future of work demands healthy and engaged employees. As the cost of providing medical benefits continue to rise, employers should assess how to make the most of plan design, including giving access to quality-based care to drive better outcomes. Plans should be reviewed with both cost optimisation and employee engagement lenses.”

Neil Narale, Mercer Marsh Benefits, Singapore Business Leader, noted: “Health and wellness solutions among corporations in Singapore continue to be underpenetrated or poorly designed. This highlights the potential value of interventions especially among high-risk groups, such as health and wellness programmes to reduce the incidence of disease, and screening for earlier detection of disease.”

“With that, moving towards integrated healthcare offerings to adopt preventive wellness measures, condition management and early intervention measures will also help employers improve the health and productivity of employees while controlling future increases in medical costs.”

To download a copy the report, please click here.

*Excludes the US.

Table 1: Insurers were asked to highlight the 3 risk factors that most influence employer sponsored group medical costs

 

Rank

Global

Asia

Europe

Latin America

Middle East, Africa

Metabolic and cardiovascular risk

1

91%

88%

92%

97%

88%

Dietary risk

2

56%

41%

51%

85%

71%

Emotional/Mental risks

3

44%

29%

61%

45%

12%

Occupational risk

4

43%

52%

42%

18%

59%

Environmental risk

5

30%

52%

19%

18%

24%

Tobacco smoke

6

22%

17%

27%

24%

24%

Childhood and maternal under nutrition

7

6%

5%

5%

0%

24%

Alcohol and drug abuse

8

5%

11%

3%

0%

0%

Traffic, violence and safety

8

5%

8%

0%

12%

0%

The report asked insurers for information on the rising cost of medical care in each market as well as the types, costs and frequency of medical conditions that were claimed for by company employees in 2018. 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 2018, US employers experienced a 3.6% increase in the average total health benefit cost per employee in 2018.

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