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Global Medical Costs Increased On Average 9.5% In 2017, Almost 3 Times The Estimated Inflation Rate

Global Medical Costs Increased On Average 9.5% In 2017, Almost 3 Times The Estimated Inflation Rate
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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

Table 1:  Rates of Medical Inflation around the World: 2018 Survey Results 

 

2017 Medical Trend Rate Experienced1

2017 estimated inflation rate †

2018 Projected Medical Trend Rate 1

2018 forecast inflation rate †

 

Global (average)‡

9.5%

3.4%

9.1%

3.5%

 

North America (average)

6.2%

1.6%

5.6%

2.2%

 

Canada

6.2%

1.6%

5.6%

2.2%

 

Asia (average)

10.4%

2.3%

10.0%

2.7%

 

China

9.5%

1.6%

10.3%

2.5%

 

Hong Kong

9.0%

1.5%

8.4%

2.2%

 

India

10.0%

3.6%

10.0%

5.0%

 

Indonesia

14.3%

3.8%

12.6%

3.5%

 

Malaysia

11.6%

3.8%

12.5%

3.2%

 

Philippines

12.4%

3.2%

13.1%

4.2%

 

Singapore

8.6%

0.6%

9.1%

1.2%

 

South Korea

7.0%

1.9%

7.0%

1.7%

 

Taiwan

10.6%

0.6%

9.0%

1.3%

 

Thailand

10.0%

0.7%

8.7%

1.4%

 

Vietnam

11.8%

3.5%

9.4%

3.8%

 

Pacific (average)

4.4%

2.0%

3.8%

2.2%

 

Australia

4.4%

2.0%

3.8%

2.2%

 

Europe (average)

7.6%

2.8%

7.5%

2.8%

 

Belgium

3.7%

2.2%

3.8%

1.6%

 

Bulgaria

13.0%

1.2%

13.5%

2.0%

 

Denmark

2.0%

1.1%

1.7%

1.4%

 

France

1.6%

1.2%

1.5%

1.5%

 

Greece

5.7%

1.1%

5.1%

0.7%

 

Hungary

10.0%

2.4%

15.0%

2.7%

 

Ireland

4.6%

0.3%

5.8%

0.9%

 

Italy

2.5%

1.3%

2.1%

1.1%

 

Latvia

8.9%

2.9%

7.0%

3.0%

 

Lithuania

16.7%

3.7%

12.1%

2.2%

 

Netherlands

2.1%

1.3%

2.1%

2.0%

 

Norway

9.1%

1.9%

7.3%

1.9%

 

Poland

10.1%

2.0%

10.7%

2.5%

 

Portugal

2.7%

1.6%

2.2%

1.6%

 

Romania

15.0%

1.3%

15.0%

4.7%

 

Russia

7.5%

3.7%

6.8%

2.8%

 

Serbia

17.5%

3.1%

15.0%

2.7%

 

Spain

4.6%

2.0%

4.4%

1.7%

 

Sweden

5.0%

1.9%

7.0%

1.5%

 

Switzerland

4.5%

0.5%

4.5%

0.7%

 

Turkey

12.0%

11.1%

14.0%

11.4%

 

Ukraine

11.4%

14.4%

11.7%

11.0%

 

United Kingdom

4.6%

2.7%

4.9%

2.7%

 

MEA (average)

12.5%

4.7%

11.9%

6.2%

 

Bahrain

12.2%

1.4%

9.2%

2.9%

 

Egypt

28.4%

23.5%

20.0%

20.1%

 

Oman

3.6%

1.6%

10.0%

2.5%

 

Qatar

13.5%

0.4%

15.0%

3.9%

 

Saudi Arabia

5.5%

-0.9%

5.5%

3.7%

 

United Arab Emirates

11.5%

2.0%

11.5%

4.2%

 

Latin America (average)

12.7%

5.9%

11.5%

4.7%

 

Argentina

32.8%

24.8%*

26.0%

19.3%*

 

Brazil

17.6%

2.9%

15.4%

3.6%

 

Chile

8.9%

2.3%

8.5%

2.0%

 

Colombia

7.5%

4.1%

7.4%

3.8%

 

Dominican Republic

4.8%

4.1%

5.5%

3.3%

 

Mexico

13.5%

6.8%

12.0%

4.1%

 

Panama

10.0%

0.8%

10.3%

0.6%

 

Peru

6.5%

1.5%

6.8%

1.2%

 
           
           

1The above medical trend rates reflect insurer survey results and may not be MMB’s view.

 
     

‡ Average of 50 participating countries with an acceptable number of responses

 

† Sources for inflation rates include:

       

• For all countries unless otherwise noted: International Monetary Fund, World Economic Outlook Database, April 2018

• For Latin America: Mercer's Latin America Economic Trends, April 2018

   

* Argentina: The source of the inflation data the source is Latin Focus Consensus Forecast.

 

Note for China cities and Mexico cities, the data refer to China and Mexico overall country data respectively.

Inflation rate information is strictly for general reference purpose; Mercer gives no guarantees as to their accuracy and will not accept liability for decisions based on them.

           
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