Survey: Globally, 78 Percent of Insurers Anticipate Higher Increases
On Oct. 13, London-based Willis Towers Watson (WTW), a British-American multinational insurance advisor company, released the results of a survey entitled, “The 2023 Global Medical Trends Survey.” A press release on the survey explains that due to the combination of inflation and increasing healthcare consumption, increases in global healthcare benefit costs are projected to hit their highest level in almost 15 years. The survey found that over three-fourths (78 percent) of insurers are anticipating higher or significantly higher increases over the next three years.
The survey was conducted between July and September 2022 and 257 insurers from 55 countries participated. The U.S. medical trend data are drawn from existing WTW research.
The press release says that “The 2023 Global Medical Trends Survey reveals that the healthcare benefit cost trend rose from 8.2 percent in 2021 to a higher-than-anticipated 8.8 percent in 2022 — and is projected to rise yet further in 2023 to a stubbornly high global average of 10 percent. The cost trend increases will hit many regions, including Latin America (where average increases are projected to climb from 18.2 percent to 18.9 percent), Asia Pacific (climbing from 6.9 percent to 10.2 percent), and the Middle East and Africa (climbing from 10.5 percent to 11.5 percent).”
Further, “Even Europe, which has traditionally seen much smaller cost increases, is not excluded from the record levels of trend. For 2023, average increases in Europe are expected to rise to 8.6 percent versus 8.0 percent in 2022. The one region with an expected decrease in medical trend is North America, where trend is projected to drop from 9.4 percent in 2022 to 6.5 percent in 2023, although employers are not necessarily seeing this yet.”
Other key highlights from the survey include:
- Seventy-four percent of insurers say the leading driver of medical costs is overuse of care due to medical professionals suggesting too many services or overprescribing
- Fifty-two percent of insurers say that insured members’ poor health habits contribute to medical costs
- Fifty percent say that the underuse of preventative services contributes to cost, in part due to the avoidance of care during the pandemic
- Insurers identified three top conditions by cost:
- Cancer
- Cardiovascular
- Musculoskeletal
- Musculoskeletal was named as the top condition for incidence of claims
- Telehealth for health delivery is helping cost management
- Seventy percent of insurers say that contracted networks of providers is the most effective cost managing method
Eric McMurray, global head of Health & Benefits, WTW was quoted in the press release saying that “Worldwide general inflation, overall instability in the global economy, increased healthcare utilization in the wake of the pandemic and a dynamic labor market require employers and insurer to think and act differently to address these issues in a meaningful way. Old solutions will not work. Cost shifting is not an option. There’s a critical need for innovation, strategy and new solutions to have any substantive impact. Those that don’t lead will fall behind in their ability to manage cost and retain key talent.”
