HONG KONG, November 29, 2023 — Asia Pacific (APAC) healthcare benefit cost increases, as reported by health insurers, show little to no decline in 2024, according to a survey by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company. Adding further emphasis to the continued risk of high medical costs, nearly three-fifths of insurers (59%) in APAC anticipate higher or significantly higher increases over the subsequent three years.
The WTW Global Medical Trends Survey found the average cost of medical care in APAC jumped from 7.2% in 2022 to a high of 9.9% in 2023. The insurer-reported cost trend for 2024 is projected to remain unchanged at 9.9%. This is influenced by variations in markets around the region, with some showing little change, and others registering slight decreases or increases from 2023 to 2024.
| 2022 | 2023 | 2024 projected | |
|---|---|---|---|
| Global+ | 7.4% | 10.7% | 9.9% |
| Asia Pacific | 7.2% | 9.9% | 9.9% |
| Australia | 4.17% | 9.37% | 9.53% |
| China | 7.38% | 7.50% | 8.35% |
| Hong Kong | 7.53% | 8.27% | 8.36% |
| India | 10.51% | 9.38% | 10.50% |
| Indonesia | 10.00% | 11.50% | 12.74% |
| Malaysia | 10.99% | 12.07% | 13.36% |
| New Zealand | 3.00% | 12.50% | 8.50% |
| Philippines | 15.50% | 13.67% | 13.94% |
| Singapore | 8.44% | 10.33% | 10.67% |
| South Korea | 9.00% | 10.67% | 11.67% |
| Taiwan | 5.75% | 5.75% | 6.25% |
| Thailand | 8.30% | 10.67% | 9.27% |
| Vietnam | 5.40% | 10.25% | 11.33% |
Moving into 2024, insurers Hong Kong are projecting that the medical trend will remain stable at 8.36%, largely due to a continuing high demand for hospitalisation resulting from earlier detection of chronic illnesses. As a result, insurers are trying to manage rising medical costs through pre-authorisation requirements and promoting outpatient surgery to reduce unnecessary hospitalisation costs.
“The overuse or misuse of care due to medical practitioners recommending too many services and the high cost of new medical technologies, ranging from artificial intelligence-powered diagnostics tools to gene therapy, remain as the leading external factors driving the persistent high trend,” said Eva Liu, Head of Strategic Development, Health & Benefits, Asia Pacific, WTW.
According to APAC insurers, the leading driver of medical costs continues to be overuse of care (72%) due to medical professionals recommending too many services or overprescribing. Half of insurers (50%) also indicate that insured members’ poor health habits are among the top factors. The underuse or lack of preventive services (39%) and inadequate understanding by insured members on how to use their plans (23%) are the other cost drivers highlighted.
In APAC, cardiovascular diseases and cancer continue to be the top two fastest-growing conditions by incidence of claims and costs. The survey also found mental and behavioural health disorders rank among the fastest-growing conditions by cost and claims over the next 18 months globally, except in APAC. Many organisations’ medical insurance programmes continue to exclude coverage for treatment of certain conditions, including mental and behavioural health such as anxiety and depression, for which treatments exist and despite a recognised need for care among the insured population.
“This could be due to the sociocultural stigmas around mental health that exist in many countries, including in Singapore, and coverage exclusions which may be in place. However, these exclusions can significantly affect employee wellbeing and Diversity, Equity & Inclusion (DEI) efforts. Generally, insurers or even employers here still lag behind global players in making changes to medical portfolios in 2023, from wellbeing services to telehealth or adding other DEI features in their programmes,” added Eva.
“Faced with the prospect of higher cost increases over the next several years, employers need to focus their efforts on how to make their healthcare benefit programmes more cost effective. This can range from conducting a review to determine if coverage is the right fit for their organisations to formulating a wellbeing strategy and ensuring wellbeing benefits are accessible to all employees. By understanding the factors that affect healthcare and drive costs in their populations, insurers and employers can develop strategies to combat the ever-present threat of rising costs in Hong Kong,” said Eric Lam, Head of Health & Benefits, Hong Kong, WTW.
WTW conducted its 2024 Global Medical Trends Survey between June and August 2023. A total of 266 leading insurers representing 66 countries, including 110 insurers from Asia Pacific, participated in the survey.
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