A recent survey by WTW indicates a consistent trend in healthcare benefit cost increases across the Asia Pacific (APAC) region, noting that nearly three-fifths (59%) of health insurers in APAC expect higher or significantly higher cost increases in the next three years.
WTW's Global Medical Trends Survey revealed that the average medical care cost in APAC rose from 7.2% in 2022 to 9.9% in 2023, with projections for 2024 indicating no change in this trend. This stability is marked by varying degrees of changes across different markets within the region. For instance, Singapore is expected to see a 10.67% increase in medical costs in 2024.
|
Region |
2022 |
2023 |
2024 Projected |
|
Global+ |
7.40% |
10.70% |
9.90% |
|
Asia Pacific |
7.20% |
9.90% |
9.90% |
|
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% |
WTW head of strategic development, health and benefits, Asia Pacific Eva Liu commented on the factors influencing these trends, noting that global inflation, a key driver in the escalation of healthcare costs, has shown signs of moderation in 2023 and is expected to continue declining into 2024. Despite this, the cost increases in most APAC markets, including the Philippines, Malaysia, India, Indonesia, South Korea, Singapore, and Vietnam, are projected to remain high.
“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,” Liu said.
The survey highlighted overuse of care (72%) as the leading driver of medical costs, attributed to medical professionals recommending excessive services or overprescribing. Poor health habits of insured members (50%), underuse or lack of preventive services (39%), and inadequate understanding by insured members on how to use their plans (23%) were also noted as significant cost drivers.
Cardiovascular diseases and cancer remain the top two fastest-growing conditions in APAC by incidence of claims and costs. However, mental and behavioural health disorders, while growing in terms of cost and claims globally, are not seeing the same trend in APAC.
Audrey Tan, head of health and benefits, Singapore, WTW, pointed out that sociocultural stigmas around mental health and coverage exclusions for treatments like anxiety and depression are prevalent in many APAC countries, including Singapore.
Tan said that such exclusions can impact employee wellbeing and efforts towards diversity, equity and inclusion (DEI). She notes that insurers and employers in the region are still behind global counterparts in incorporating wellbeing services or adding DEI features in their programs.
“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 Singapore,” Tan said.
In other recent developments, the global brokerage has also introduced A-Star, a new excess layer directors' and officers' (D&O) insurance solution.
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