News: Healthcare benefits cost may increase by 7.6% in APAC region: Report

Benefits & Rewards

Healthcare benefits cost may increase by 7.6% in APAC region: Report

The leading driver of medical costs continues to be overuse of care (64%) due to medical professionals recommending too many services or overprescribing.
Healthcare benefits cost may increase by 7.6% in APAC region: Report

According to the latest survey conducted by Willis Towers Watson, healthcare benefit costs may increase by an average of 7.6% in 2022 in the APAC region.

The projected healthcare benefit costs declined in 2020 before rebounding to 7% in 2021. Notably, the survey disclosed sizeable variation in cost trend increases by markets. With COVID-19 surging in different countries at various times in 2020 and  2021, survey results showed the pandemic’s asymmetrical arc created considerable volatility in healthcare utilisation and costs around the world. 

When comparing specific markets in APAC, insurers expect cost trends to be as high as 16.2% in Malaysia and 23.5% in India next year, while in China, Singapore and Vietnam, the increase is projected at 8.3% and 9% respectively according to the research. Looking ahead, medical insurers expect healthcare cost trends to accelerate beyond 2022, with six in ten projecting higher or significantly higher costs over the next three years.  

Commenting on the findings, Cedric Luah, Head of Health and Benefits, International, WTW said, “Markets and employers are feeling the impact differently. Some have experienced the recovery’s demand for regular medical services in 2021, while others will see it next year or after. The pandemic, combined with the changing face of  work, has had a significant effect on healthcare needs, delivery of services and the  future drivers of medical claims, which in turn will have an impact on medical inflation  trends.” 

Excess of care by insured members (59%) is the second leading driver. The underuse of preventive services (38%) is also a significant cost driver and increased year-over-year due to, in part, the avoidance of medical care during the pandemic. 

Insurers in APAC named cancer (76%), cardiovascular (62%) and musculoskeletal (48%) as the top three conditions by cost, identical to last year’s findings. They have also ranked musculoskeletal, and mental and behavioural disorders as two of the fastest-growing conditions by cost they expect to see over the next 18 months. 

According to the survey, almost four in 10 insurers (35%) identified the addition of new wellbeing services as the biggest change organisations in APAC have made to their medical portfolios in 2021. This is followed by telehealth services (26%), underscored by the potential for cost reductions that virtual healthcare creates. Half of the insurers now offer telehealth across select plans, with 92% offering these services at no additional cost. 

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Topics: Benefits & Rewards, Compensation & Benefits, #EmployeeExperience

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