MANILA, January 6, 2025 — For the third consecutive year, medical costs in the Philippines are projected to increase by double digits, with little relief in sight. That’s according to a survey of health insurers conducted by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company. Survey respondents cited increased use of health services, rising hospital and clinic costs, increased professional fees and a higher frequency of diseases as the drivers of overall medical costs in the country.
The WTW Global Medical Trends Survey found medical insurance costs increase is expected to increase by 18.3% in the Philippines, the second highest growth among markets in Asia Pacific (APAC). While the trend may be slightly cooling from 2024, it is projected to remain elevated over the longer term.
| 2023 | 2024 | 2025 projected | |
|---|---|---|---|
| Global+ | 10.7% | 10.4% | 10.4% |
| North America | 7.8% | 8.1% | 8.7% |
| Latin America | 10.8% | 10.4% | 10.1% |
| Asia Pacific | 10.9% | 11.9% | 12.3% |
| Europe | 11.0% | 10.1% | 9.4% |
| APAC markets with higher percentages than regional average in 2025 (projected) | |||
| Indonesia | 12.4% | 15.6% | 19.4% |
| Philippines | 17.9% | 19.3% | 18.3% |
| Malaysia | 16.6% | 14.9% | 16.4% |
| New Zealand | 11.0% | 16.0% | 16.0% |
| Thailand | 12.3% | 15.2% | 14.2% |
| India | 10.4% | 12.5% | 13.2% |
| APAC markets with lower percentages than regional average in 2025 (projected) | |||
| Singapore | 13.7% | 12.0% | 12.0% |
| South Korea | 11.7% | 11.6% | 11.9% |
| Vietnam | 4.8% | 20.5% | 11.2% |
| Australia | 9.2% | 8.5% | 11.1% |
| Taiwan | 8.0% | 9.0% | 11.0% |
| China | 8.7% | 10.5% | 10.8% |
| Hong Kong | 10.3% | 10.3% | 9.8% |
The health maintenance organization (HMO) industry in the Philippines experienced significant losses of PHP 1.433 billion (USD 25 million) in 2022, and nearly tripling to PHP 4.269 billion IUSD 75 million) in 2023 due to substantial increase in claims and benefits paid. Since then, the HMO industry has adjusted its pricing assumptions annually to address the continuous increase in utilisation trends. Medical inflation in the country has been hovering between 15% and 18% over the last three years, rising to 19.3% in 2024.
“Although reports indicate that HMOs are recovering in the first half of 2024, ongoing negotiations between two HMO associations and various doctor groups regarding a potential 80% to 150% increase in professional fees are still driving the projected double-digit medical inflation projected for 2025,” said Nel Badal, Head of Health & Benefits, Philippines, WTW.
Claims frequency has significantly rebounded in the Philippines, now surpassing the pre-pandemic levels of 2019, with the cost per claim rising primarily due to higher costs of medical services and procedures.
Insurers are facing heightened increases in both utilization and unit prices as primary cost drivers. In APAC, nearly three in five insurers attribute the increase to an even split between unit cost and utilization.
Internal drivers of medical costs are perpetuated by behaviors of healthcare providers and insured members. The top factor reported is medical practitioners recommending too many services (79%), including overprescription of both medications and diagnostics, which results in unnecessary and excessive costs.
External factors that insurers cite as healthcare cost drivers this year include higher cost of new medical technologies (73%); the continued pressure being placed on private healthcare providers as public healthcare systems are overwhelmed (40%) which leaves many employees to turn to and rely on private medical providers; as well as the lack of cost sharing in plan design (39%).
“Continued pressure is being placed on private healthcare providers in the Philippines. Although the rise in availability of telehealth and other virtual care offerings is expanding access to healthcare in the Philippines, it also contributes to increasing costs. Coupled with the shortage of manpower in the healthcare sector in the country, the double digits trend of medical cost increases remains and is expected to rise in the near future,” added Nel.
“Sustainable solutions and joint efforts from individuals, healthcare providers and government are needed to build a more resilient and cost-effective healthcare system to ensure that quality care remains accessible to all at an affordable price. Cost sharing aimed at apportioning medical costs between insurers and members can also help to manage costs. This will help to minimise overuse and overprescription of care.”
WTW conducted its 2025 Global Medical Trends Survey between June and August 2024. A total of 348 leading health insurers representing 75 countries participated in our survey. In addition to submissions from insurers, we received input from WTW local brokers representing 55 countries. The combined data covers 90 countries, including markets in Asia Pacific.
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