Employer-sponsored healthcare benefit costs in Asia-Pacific are expected to increase by an average of 7.6% in 2022, according to a survey of medical insurers by Willis Towers Watson.
In its 2022 Global Medical Trends Survey, WTW found that projected healthcare benefit costs in the region declined by 5.4% in 2020 before rebounding to 7% in 2021. The survey noted sizeable variations in cost trend increases by markets, with India having the highest projected increase for 2022 at 23.5%. On the other hand, South Korea’s projected healthcare benefit cost increase is the lowest in the region at 2.7%.
WTW said that due to COVID-19 surging in different countries at various times in 2020 and 2021, the survey reflected the pandemic’s asymmetrical arc that created considerable volatility in healthcare utilisation and costs around the world.
“COVID-19 has produced the biggest impact to global medical trend variation the industry has seen, and we expect the resultant repercussions and volatility to extend into 2022 and beyond,” said Cedric Luah, head of health and benefits, international, Willis Towers Watson. “Markets and employers are feeling the impact differently. Some have experienced the recovery’s demand for regular medical services in 2021, while others will see it next year or after. The pandemic, combined with the changing face of work, has had a significant effect on healthcare needs, delivery of services and the future drivers of medical claims, which in turn will have impact on medical inflation trends.”
According to the survey, overuse of care (64%) remained the leading driver of medical costs, due to medical professionals recommending too many services or overprescribing. This was followed by excess of care by insured members (59%). The underuse of preventive services (38%) was also a significant cost driver and increased year over year, due in part to the avoidance of medical care during the pandemic.
Cancer (76%), cardiovascular disorders (62%) and musculoskeletal disorders (48%) were identified as the top three conditions in terms of cost, same as last year’s findings. Musculoskeletal and mental/behavioural disorders were named as the fastest-growing conditions, in terms of cost, over the next 18 months.
“COVID-19 has caused volatility in the trend numbers and in the leading causes of claims,” Luah said. “The sedentary lifestyle that often accompanies working from home has also increased the risk of musculoskeletal injuries. For the first time ever, we are seeing musculoskeletal conditions as the leading claim incidence globally. As most employers can attest, mental health claims are also on the rise.”
Almost four in 10 insurers (35%) identified the addition of new wellbeing services as the biggest change organisations in APAC have made to their medical portfolios in 2021. This is followed by telehealth services (26%), which highlight the potential for virtual healthcare to create opportunities for cost reduction. Half of the insurers surveyed now offer telehealth across select plans, with 92% offering these services at no additional cost.
Healthcare benefit cost growth, 2020 – 2022
|
|
2020 |
2021 |
2022 projected |
|
Global (ex. Venezuela) |
4.8% |
8.1% |
8.1% |
|
Asia-Pacific |
5.4% |
7% |
7.6% |
|
Australia |
2.8% |
5% |
4.3% |
|
China |
5.5% |
7.2% |
8.3% |
|
Hong Kong |
6.5% |
6.8% |
8.2% |
|
India |
18.5% |
25% |
23.5% |
|
Indonesia |
6.2% |
7% |
7.4% |
|
Malaysia |
9.5% |
7.7% |
16.2% |
|
New Zealand |
2% |
9.4% |
6.9% |
|
Philippines |
6.4% |
16.4% |
14.4% |
|
Singapore |
7.7% |
8.6% |
9% |
|
South Korea |
3.7% |
0% |
2.7% |
|
Taiwan |
5.8% |
5.8% |
6.8% |
|
Thailand |
9% |
11.3% |
9.2% |
|
Vietnam |
5.3% |
7% |
9% |
