Managing medical trend

Cost sharing

As was the case in past surveys, insurers identified member coinsurance as the most typical cost-sharing approach in all regions but Europe, where socialized medicine skews the results. There is also wide regional variation. In Latin America, 55% of insurers say member coinsurance is very typical, while only 19% of respondents in Asia Pacific report that this is the case.

Among other cost-sharing mechanisms are deductibles, which are very typical in Latin America (39%) and Europe (27%). In addition, 46% of insurers in the Middle East and Africa indicate that deductibles are a typical practice, as do 23% of those in Asia Pacific.

Less prevalent are annual limits on out-of-pocket expenses, which less than one-fifth (16%) of insurers report as a very typical practice.

Methods and tools for managing medical costs

Seventy-five percent of insurers globally indicate that using contracted networks of providers for all treatments is the most effective method for managing medical costs (Figure 1). This is the most popular cost management method in Latin America (96%), Europe (82%) and Asia Pacific (64%), and the second most prevalent cost management practice in the Middle East and Africa (85%), where limits on certain services (87%) is the leading method of managing costs.

Figure 1. Methods and tools to effectively manage medical costs

Preapproval for scheduled inpatient services was the second most popular cost management tool, with 67% of insurers globally citing this as an effective approach to managing costs. Roughly three-quarters of insurers in Latin America (78%) and the Middle East and Africa (77%) find this to be an effective cost management method.

Telehealth emerged as the third most popular method of managing costs, with 63% of insurers globally indicating that telehealth is an effective cost management method, up from 54% last year. There is a significant increase in insurers reporting that telehealth is an effective cost management tool in Latin America, where 79% of insurers hold this view, up from 38% last year. Increases were also seen in Asia Pacific, where 60% report that telehealth is an effective cost management method versus 46% last year, and in Europe where the percentage of insurers holding this view rose from 61% to 67%.

Claims data availability

For policies covering more than 500 lives, insurers are most likely to provide aggregate claims data identified by the top 10 medical causes or conditions to clients (81%), followed by high-level claims data only — total claims incurred (60%) and data on medical facilities used by the insured population (56%). Two-fifths (39%) provide data on the use of telehealth by the insured population, up from 32% in the prior year. Only 35% of policies (with either 200-plus or 500-plus lives) provide individual claims data indicating service provided and diagnosis, which is disappointing from an analytics perspective.

Nearly half of insurers globally (48%) use the ICD-10 claim-coding system (Figure 2). This system is most popular with insurers in Latin America (76%) and the Middle East and Africa (77%). It is less popular with insurers in Asia Pacific (51%) and Europe (36%).

Figure 2. Claim coding systems used to adjudicate medical claims

Figure 3. Global use of coding systems

Note: Percentages do not add to 100 due to rounding.

We continue to see a trend toward more standardized claims data reporting using the ICD systems. Only 7% of insurers in Latin America are now using a local coding system, down from 15% last year; however, 14% of insurers in the Middle East and Africa continue to use a local system.

Medical insurance program exclusions

Insurers globally continue to exclude a significant number of conditions for which there is a demonstrable need for care among the insured population and for which there are treatments to make these conditions manageable. These include HIV/AIDS as well as alcoholism and drug use. In the case of HIV/AIDS, the percentage of group policies for more than 500 employees excluding this condition jumped from 41% last year to 54% today (Figure 4).

Figure 4. Exclusions in standard medical insurance Insurers globally continue to programs global perspective

There are also some key regional differences when it comes to these exclusions. In Latin America, only between 7% and 10% of group policies regardless of size exclude HIV/AIDS, while in Asia Pacific and the Middle East and Africa, over half of group policies regardless of size exclude this condition. Additionally, over half of all group policies in the Middle East and Africa have exclusions for alcoholism and drug use, while in Europe, between 40% and 43% of all group policies have this exclusion.

Also appearing on this year’s exclusion list are pandemics, which may reflect the fact that in some countries, governments may be bearing most of the pandemic costs. Globally, 39% of group policies covering more than 500 employees exclude pandemics.

Key changes to medical portfolios in 2021

Telehealth services

Globally, 37% of organizations added telehealth services to their medical portfolios, a number that rises to 47% in Europe (Figure 5).

Figure 5. Biggest change your organization has made to its medical portfolio in 2021

New wellbeing services

A quarter of organizations globally (26%) added new wellbeing services to their programs, a figure that jumps to 35% in Asia Pacific and 45% in the Middle East and Africa.