Healthcare benefit costs shouldered by employers are expected to increase by over 8 percent worldwide next year, a survey conducted among medical insurers showed.
The study conducted by Nasdaq-listed Willis Towers Watson, a leading global advisory, broking, and solutions company, showed that the healthcare benefit costs will make a rebound after incurring a significant impact on healthcare utilization and overall costs this year.
The 2021 Global Medical Trends Survey, the largest of its kind, was conducted between July and September 2020 and reflects responses from 287 leading medical insurers operating in 76 countries.
The survey found that medical insurers globally project health care benefit costs will take a sudden drop in 2020 before rebounding to 8.1% in 2021, up from 5.9% this year and 7.2% in 2019.
Average increases in the five regions next year will range from 5.8% in Europe to 13.6% in Latin America. Growth in healthcare benefit costs was also noted in North America from 7.1%, Asia Pacific from 8.5%, and the Middle East and Africa at 10%.
Health care benefit cost increases in the United States are expected to remain stable at 7.3% next year.
The global study also found that over two-thirds or 67%of respondents expect medical costs are going to accelerate over the next three years.
In the Middle East and Africa, almost 90% of medical insurers expect higher medical trends over the next three years followed by insurers in Europe (77%). Only 40% of Asia Pacific insurers, however, expect a higher medical trend.
“The pandemic undoubtedly had a major impact on slowing trend increases this year as it sparked a sharp decline in non-urgent surgeries and elective care,” said Francis Coleman, managing director, Willis Towers Watson.
“While most, but not all, countries experienced a decrease in trend this year, that is expected to be short-lived. In fact, we expect to see significant volatility in 2021 results, which are dependent on the impact of COVID-19 and whether a vaccine becomes available early in the year, who pays for it, and the extent of its availability,” Coleman said.
Also, Coleman stressed there is uncertainty about how COVID-19 testing and treatment costs for 2021 will continue to be split between government, insurers, and employers.
What are the healthcare findings of the 2021 Global Medical Trends Survey?
According to the Global Medical Trends Survey, cancer (80%), cardiovascular diseases (56%), and conditions affecting musculoskeletal and connective tissue (41%) were the top three conditions currently affecting medical costs.
Interestingly, about four in 10 respondents predict mental health conditions will be among the three most common conditions affecting costs within the next 18 months (40%), and among the three most expensive in the next 18 months (39%).
When asked for the most significant cost-driving factors outside the control of employers and vendors, just over half of respondents (51%) cited the high cost of medical technology, followed by providers’ profit motives (36%) and epidemics and global pandemics (34%).
“Further uncertainty around medical trend lies ahead as we start to see the true impact of delayed treatment in 2020 and the long-term effects on those who contracted COVID-19,” said Emma Tekstra, managing director, Willis Towers Watson.
Nevertheless, Tekstra said that COVID-19 has greatly accelerated the adoption and use of telehealth, which could help offset those potential higher healthcare benefit costs and provide a more efficient way for those insured to access and use healthcare in the future.
However, the use of telehealth and online consultations may also boost utilization due to ease of access and add to overall costs.
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