2023 Will See The Greatest Level Of Global Health Care Benefit Expenses In 15 years.

Companies that don’t innovate, strategize, and find new solutions will fall behind in their ability to retain key talent, according to a new report. Old solutions, like cost shifting, will not work.

According to a recent research from WTW, rising health care utilization and general inflation are working together to push anticipated growth in global health care benefit prices to their highest level in almost 15 years.

According to the 2023 Global Medical Trends Survey, the average cost of health care benefits increased from 8.2% in 2021 to an unexpectedly high 8.8% in 2022. This trend is expected to continue in 2023, reaching a high global average of 10%. The cost trend increases will affect a variety of geographical areas, including Latin America (where average increases are projected to climb from 18.2% to 18.9%), Asia Pacific (where increases are projected to rise from 6.9% to 10.2%), and the Middle East and Africa (where increases are projected to rise from 10.5% to 11.5%).

“Old remedies won’t work. It is not possible to shift the costs. Innovation, strategy, and fresh approaches are absolutely necessary for any meaningful influence. Those that don’t take the initiative will lag behind in their capacity to control costs and hold onto key personnel, predicts Eric McMurray, global head of Health & Benefits at WTW.

According to insurers, overuse of care (74%) as a result of excessive service recommendations or overprescribing by medical experts continues to be the main cause of medical costs. The poor health behaviors of insured individuals are also listed as one of the main factors by more than half (52%) of insurers. Another key cost-driver is the 50% underuse of preventative treatments, which has risen year over year in part as a result of people putting off seeking medical attention during the pandemic.

It’s interesting to note that respondents ranked musculoskeletal conditions higher this year than they did last, ranking them fifth in terms of the frequency of claims. The report also showed that telehealth, which rose from third place in last year’s survey to second place this year, is still gaining ground in terms of health delivery and cost control. Contractual networks of providers were once more recognized as the most efficient way to control medical costs by insurers (70%)

“Globally, employers are looking to provide employees with better support tools to help triage the best or optimal level of care they need, including use of virtual or telehealth services to identify if hospital or emergency rooms (which can be a high cost event) are necessary in a situation,” writes Francis Coleman, managing director, Integrated & Global Solutions, WTW. More details are also given about using less expensive network options or hospitals as alternatives to those with the highest prices, she continues. Finally, more digital services and apps are being introduced, which may offer a delivery alternative with reduced costs and simpler access for high claims incidence sectors like musculoskeletal.

According to earlier polls, the high cost of new medical technologies (62%) and the providers’ profit-driven practices (35%%) remain the main drivers of medical expenditures. This year, insurers also point to more general problems that have an impact on these expenses, such as the deterioration of public health system finances (27%) and geopolitical conflicts (19%).

Source: https://www.benefitspro.com/2022/11/18/2023-global-health-care-benefit-costs-to-reach-highest-level-in-15-years/