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Gaining better control of rising healthcare costs

Insurers are reaching out to members earlier to address potential health issues before they occur.

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Many people still aren't aware of how profoundly their everyday decisions from a young age - what they eat and drink, whether they smoke, how often they exercise - significantly impact their long-term health. Globally, poor health associated with ageing is the next epidemic.

CONTINUING a decades-long phenomenon, global healthcare costs are rapidly rising as populations age, chronic conditions become more prevalent and demand for healthcare services outpaces supply. In Asia, several developments continue to drive an upward trend in the cost of healthcare benefits today. The availability of advanced medical technology, appeal of medical tourism, and even an unregulated private medical sector in certain parts of the region are just some of the key factors behind an unabated rise.

Hoping to alleviate the issue in Singapore and keep healthcare costs sustainable, the Ministry of Health recently appointed a committee to develop medical fee benchmarks for common clinical procedures, with a view of including less common procedures like X-rays and MRIs in the longer term.

To reduce hospital admission rates, more emphasis is now being placed on encouraging primary care and prevention, and patients are gradually seeing reason to take charge of their own health. One such scheme at the Khoo Teck Puat Hospital reduced the average six-month re-admission rate for the first batch of participants by more than 60 per cent. A lot more can be done, however, and as progress is made in the public sector, companies too can play a vital role to help alleviate the inevitable rise in overall healthcare costs.

The win-win model: better healthcare for employees and employers

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The cost of medical care in Singapore, and much of Asia, has hit record-high levels in recent years; there's also been an increasing reliance on employer-sponsored plans. With this, a new landscape is emerging, one where insurers work ever more closely with businesses to manage their claim costs while continuing to increase the level of health support provided.

While we can't stop global medical costs from rising, there is much that can be done to more effectively temper the impact of rising costs through early intervention, care management, innovation, and proactive engagement with customers and healthcare providers. Everyone wins.

In a Willis Towers Watson survey of insurers, close to half said they expect the medical cost inflation trend in Asia Pacific to be higher or significantly higher over the next three years compared to current rates. Another survey of brokers, employers and insurers by Aon found that the top three cost elements in Asia Pacific are hospitalisation, physician services and clinics/labs; and the gross annual medical inflation trend rate in Singapore for 2018 is expected to be 10 per cent, higher than the regional rate of 8.9 per cent for the same year.

Shifting the focus: personalised, value-based approach

In better understanding the motivations behind healthcare decisions and requirements, we can better address rising costs and provide solutions that members truly need. In the end, an employer who offers not just attractive but also appropriate health benefits will be able to foster teams that are more productive and engaged, carving out a sharper competitive edge in the market.

Mapping employee population health risks and the preferred ways of using benefit plans need enhanced metrics and standardised reporting, and we're seeing more employers addressing clinical inefficiencies and duplication of services, as well as mandating pre-approval for scheduled inpatient services and capping specific medical services to manage costs.

A highly customised approach can bring back greater control and minimise unpredictability of costs for companies, while the adoption of value-based care - in which healthcare providers, including hospitals and physicians, are paid based on patient health outcomes - is another shift we're seeing.

Planning ahead for good health: pre-emption and prevention

Alleviating the cost burden also means ensuring that people are aware of the significance and impact of healthy living. Despite oceans of clinical data, many people still aren't aware of how profoundly their everyday decisions from a young age - what they eat and drink, whether they smoke, how often they exercise - really do significantly impact their long-term health.

Globally, poor health associated with ageing is the next epidemic.

Fortunately, employee health and wellness programmes are gaining more traction in this region - they're a viable method to manage (and slow) a rise in claims costs but a major opportunity to also contribute significantly to employees' health. These programmes are especially relevant to Asia given the many health hazards that result from poor eating habits and lack of regular exercise.

For the insurers, by reaching out to members earlier to address potential health issues before they hit, we can also play a key role in helping to drive better health and lifestyle choices. Today we are underscoring the importance of preventive care in all our benefits plans.

Taking care online

An increase in virtual healthcare is another big trend which will continue to play out in 2018. We're seeing increasing demand for the adoption of digital technologies to deliver health services at the click of a button. In markets like Singapore where the availability and adoption of new technologies are incredibly advanced, there's a huge opportunity to tap into the sweet spot between technology and healthcare provision. By no means do we envisage a world where doctors, hospitals, nurses and clinics don't exist. But what technology can do is open up new layers of care.

Through app technologies we can create an online health and wellness ecosystem that's accessed remotely, anytime, anywhere, via a mobile device; from face-to-face appointments with doctors to accessing tools, resources, prescriptions, insurance documents and claims tracking at the click of a button (or more appropriately, the touch of a screen).

New technologies are also opening up more avenues for prevention, with predictive analytics allowing us to identify high-risk individuals and provide the necessary early intervention to mitigate or slow the onset of health issues. Meanwhile data-mining will improve patient profiling and electronic health records will create more efficient, streamlined care.

Technology has the power to open up a new level of convenience alongside the opportunity to personalise the patient experience in an entirely new way, while for employers paying the bills, it minimises cumulative claims costs. As an industry, we must continue embracing smart technologies and processes. It's one of the biggest opportunities ahead of us today.

Yes, healthcare benefit costs are rising, but by collaborating across the industry to implement new and innovative ways to better understand and address the health and medical services that are needed, we can ride the trend, bend the curve and manage costs effectively.

As health insurers, we will continue playing the important role of gatekeepers: reviewing and adopting innovative and sustainable solutions that manage claims costs for employers, while never neglecting the careful balance required to ensure every member receives the best possible care.

  • The writer is managing director for Asia Pacific at Aetna International.