More than half (58 per cent) of global insurers say they anticipate higher health benefits costs over the next three years, with the average global cost trend projected to increase by 9.9 per cent in 2024, according to a new survey by WTW.
The survey, which polled more than 260 insurers representing 66 countries, found the cost of medical care jumped to a record high of 10.7 per cent in 2023, up from 7.4 per cent in 2022. The leading driver of medical costs was overuse of care due to medical professionals recommending too many services or overprescribing (59 per cent), followed by plan members’ poor health habits (49 per cent) and underuse or lack of preventative services (47 per cent).
In Canada, prescription drugs made up roughly 60 per cent of health-care costs, driven by new high-cost specialty drugs and increased off-label use of anti-obesity drugs. Across all regions, cancer (78 per cent) and cardiovascular conditions (67 per cent) remained the top conditions by cost.
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More than half (54 per cent) of insurers said the addition of well-being services was the biggest change they made to their medical benefits portfolio in 2023, while 41 per cent said they added telehealth services.
“Employers are facing both higher cost increases as well as the potential for significant volatility, making it even more difficult to budget and plan,” said Debby Moorman, WTW’s head of health and benefits in North America, in a press release. “Employers must understand their risk tolerance, review their current offerings to ensure optimal value and explore strategies to balance cost pressures with the need to support the employee experience.
“By understanding the factors that affect health care and drive costs in their populations, employers can effectively combat the ever-present threat of rising costs.”
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