Employer-sponsored health benefits cost trends are expected to increase by a record 10 per cent on average globally in 2023, amid rising inflation and increasing health-care utilization, according to a new survey by WTW.
The survey, which polled more than 250 insurers representing 55 countries, found cost trends in Canada are expected to increase by 6.3 per cent. By comparison, costs trends are expected to be as high as 18.9 per cent in Latin America, followed by 11.5 per cent in the Middle East and Africa, 10.2 per cent in Asia Pacific and 8.6 per cent in Europe.
More than three-quarters (78 per cent) of insurers said they anticipate higher or significantly higher increases over the next three years. The leading driver of these costs is overuse of care due to medical professionals recommending too many services or overprescribing (74 per cent), followed by plan members’ poor health habits (52 per cent) and the underuse of preventive services (50 per cent).
Insurers ranked musculoskeletal disorders, cancer and cardiovascular disorders as the top three conditions by cost. The top cost management method was contracted networks of providers, cited by 70 per cent of respondents.
“Health-care affordability remains top of mind for insurers, employers and employees,” said Francis Coleman, managing director of integrated and global solutions at WTW, in a press release. “As we move into next year, we see a challenging year for employers in trying to balance the convergence of rising medical trend, salary pressures and the need to continue to make progress on diversity, equity and inclusion initiatives globally, all while dealing with potential recessionary markets.”