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Global Healthcare Benefit Cost Increases Projected to Continue Into 2024

In this iPMI Global Insights article, iPMI report author Ian Youngman, takes a look at the 2024 Global Medical Trends Survey and projections that global healthcare benefits will increase in cost into 2024.

Ian Youngman is a writer and researcher specialising in insurance. He writes regularly for a variety of magazines, newsletters, and on-line services. He publishes a range of market reports, and undertakes research for companies. To read his latest report, International Health Insurance 2023, please click here, or visit the REPORTS section of iPMI Global.

2023

  • Global medical care benefit cost increases, as reported by health insurers, show little to no decline in 2024, one year after hitting a historic double-digit inflation, according to a survey by WTW.
  • Adding further emphasis to the continued risk of high medical costs 58% of insurers anticipate higher or significantly higher increases over the subsequent three years.
  • The WTW Global Medical Trends Survey found the cost of medical care globally jumped from 7.4% in 2022 to a record high of 10.7% in 2023.
  • The insurer-reported cost trend for 2024 is projected to be an average of 9.9%.
  • This is influenced by variations in regions around the world, with some showing little to no change from 2023 to 2024, and others registering slight decreases or increases.
  • The sharpest drop in the rate increase is projected in Europe – from 10.9% in 2023 to 9.3% in 2024, the lowest increase projected in any region.
  • The one region with an expected increase in medical trend is the Middle East/Africa, where increases are projected to rise from 11.3% in 2023 to 12.1% in 2024.
  • Global inflation, which was a significant factor in driving up healthcare costs, has moderated in 2023 is expected to continue to fall going into 2024.
  • While some cost increases are projected to ease in 2024, they remain at significantly high levels.
  • The high cost of new medical technologies is a key reason for the persistently high trend.”
  • Global medical trends: Healthcare benefit cost increases, 2022 – 2024.
  • Global and Latin America numbers exclude Argentina and Venezuela.

·       

 

2022

2023

2024 projected

Global+

7.4%

10.7%

9.9%

North America

8.0%

9.8%

9.4%

Latin America

10.5%

12.4%

11.6%

Asia Pacific

7.2%

9.9%

9.9%

Europe

6.7%

10.9%

9.3%

UK

9.3%

13.0%

11.2%

Middle East/Africa

9.8%

11.3%

12.1%

 

  • The leading driver of medical costs, according to insurers, continues to be overuse of care (59%) due to medical professionals recommending too many services or overprescribing.
  • 49% of insurers indicate that insured members’ poor health habits are among the top factors.
  • The underuse or lack of preventive services (47%) is also a significant cost driver.
  • The addition of wellbeing services (54%) was the biggest change insurers made to their medical portfolio in 2023. Telehealth offerings continue to be a priority for insurers. Faced with the prospect of higher cost increases over the long-term, employers should focus their efforts on how to make their healthcare benefit programmes more cost effective.
  • This can range from conducting a review to determine if cover is the right fit for their organisation and effective treatment specific pathways are in place, to formulating a global wellbeing strategy and ensuring wellbeing benefits are accessible to all employees and their families.
  • By understanding the factors that affect healthcare, insurers and employers can develop strategies to combat the ever-present threat of rising costs.
  • WTW conducted its 2024 Global Medical Trends Survey between June and August 2023. A total of 266 leading insurers representing 66 countries participated in the survey.

Asia-Pacific

  • 59% of health insurers in APAC expect higher or significantly higher cost increases in the next three years.
  • 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.
  • Singapore is expected to see a 10.67% increase in medical costs in 2024.
  • Cost increases in most APAC markets, including the Philippines, Malaysia, India, Indonesia, South Korea, Singapore, and Vietnam, are projected to remain high.
  • Cardiovascular diseases and cancer remain the top two fastest-growing conditions in APAC by incidence of claims and costs.
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