Rising Healthcare Costs: Whom Will They Hurt the Most?
According to a new report from Willis Towers Watson, employer-provided healthcare-benefit costs are predicted to increase in 2019. The global weighted medical trend is predicted to be 7.6 percent, an increase from 2018’s 7.1 percent. While the forecast for the global-cost increase is modest, it does outpace general inflation by a ratio of more than 2:1 (the current inflation rate in the U.S., for example, is 2.3 percent).
The report, which surveyed 307 leading insurers from 77 countries worldwide, found that while Europe, for instance, is predicted to see no change to costs, other regions’ medical markets will see drastic increases. Africa and the Middle East fair the worst in the predictions, jumping from 9.9 percent in 2018 to 12.4 percent in 2019. The U.S. number is projected to decrease from 2018 but remains above the global average (8.1 percent in 2018 to 7.9 percent in 2019).
“Rising healthcare costs continue to be a major issue for insurers and employers globally as increases continue to outstrip inflation … and are unsustainable over the long term,” said Cecil Hemingway, managing director and global co-head of health and benefits at Willis Towers Watson. “To better control costs, many employers are taking a close look at how they design and deliver healthcare benefits. This includes how medical treatment is being provided, the reliance on pharmacy services and the cost implications of innovative future treatments, all of which can fuel sharp cost increases down the road.”
Respondents were asked to name the top three significant factors driving up medical costs per person—the No. 1 answer was overuse in care from practitioners recommending too many services (70 percent). This was followed by overuse of care by insured members (52 percent) and insured members’ poor health habits (36 percent).
Across the board, the top three most common and costly conditions were: circulatory system/cardiovascular, musculoskeletal and connective tissue, and cancer. Of note, Willis Towers Watson reported that diabetes is projected to become a major player in both cost and prevalence increases over the next three to five years, as is mental health.