Key Asean markets could see above-average increase in medical costs in 2019: Survey

NOVEMBER 14, 2018 - 12:31 PM

THE cost of workplace health benefits is expected to jump by 7.8 per cent in the Asia-Pacific in 2019, with double-digit growth in four Asean markets polled, an industry study has found. Worldwide, the estimated average increase is 7.6 per cent.

Vietnam’s gross cost trend was the highest in the region, with a projected 16.3 per cent rise in 2019 - jumping from 11 per cent in 2017 - followed by Malaysia, where prices will increase from 9 per cent to 13.1 per cent in the same period

Commenting on the price surge in Malaysia, Willis Towers Watson’s 2019 Global Medical Trends Survey Report said that “the availability and adoption of new medical technologies and equipment is part of the reason for medical cost being driven upwards”.

“We continue to observe medical service providers recommending potentially unnecessary treatment or diagnostic procedures, resulting in higher overall bills,” it noted.

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“In addition, while we see some interest in corporate wellness programmes, the focus remains on curing or alleviating conditions, rather than using preventive measures and effective well-being initiatives.”

According to the report, the Philippines may see a rise in healthcare costs hitting 11.5 per cent - up from 8.8 per cent in 2017 - amid the domination of the private health insurance market by health maintenance organisations, or HMOs.

“A typical plan covers 100 per cent of in-patient and out-patient care within the HMO’s network, up to a maximum plan limit. However, many plan designs lack consumerism elements such as deductibles and co-pays, discouraging responsible use,” the report said.

“This, combined with poor triaging in hospitals nationwide, fuels annual cost increases.”

Indonesia bucked the trend: The increase in expenses is expected to moderate, dipping from 11.1 per cent in 2017 to 10.8 per cent in 2019.

Still, the rate of increase outpaced regional and global averages in all six South-east Asian countries surveyed, as Singapore (9.1 per cent) and Thailand (8.5 per cent) rounded off the pack.

Singapore’s ageing population and more sophisticated equipment and treatments are driving medical inflation, said the report. “There is also a shortage of medical facilities and capacity, which is not helped by the popularity of Singapore as a regional destination for medical tourism.”

Consultancy firm Willis Towers Watson surveyed 307 medical insurers from 77 countries between July and September 2018.

Cedric Luah, head of health and benefits for Asia and Australasia at Willis Towers Watson, said in a media statement: “While the regional average trend rate is moderate, the reality on the ground for many employers is that rising health care costs continue to be a major issue, and are unsustainable over the long term.”

He added: “While cost management remains critically important, we expect more structural changes may be needed around how medical services are consumed and provided.”

Mr Luah said that costs are driven by the over-use of care in many markets, such as when overly cautious medical practitioners recommend unnecessary treatments or procedures.

“There is also an issue of lack of access and delays in service which has impacted markets like India (and) Vietnam for instance,” he said.