Employer-sponsored health benefits cost trends are expected to increase 8.1 per cent on average globally in 2022, according to a new survey by Willis Towers Watson.
The survey, which polled medical insurers across various geographic regions, found cost trends are expected to be as high as 14.2 per cent in Latin America, followed by 10.6 per cent in the Middle East and Africa, 7.6 per cent in both Asia Pacific and the U.S. and 6.7 per cent across Europe.
Looking ahead, medical insurers expect health-care cost trends to accelerate beyond 2022, with more than three-quarters projecting higher or significantly higher costs over the next three years.
“COVID-19 has produced the biggest impact to global medical trend variation the industry has seen and we expect the repercussion and volatility from it to extend into 2022 and beyond,” said Eric McMurray, global head of health and benefits at Willis Towers Watson, in a press release. “Countries and employers are feeling the impact differently. Some have experienced the recovery’s demand for regular medical services in 2021, while others will see it next year or after. The pandemic, combined with the changing face of work, has had a significant effect on medical trends, delivery of services and the future drivers of medical claims.”
Survey respondents acknowledged that the pandemic has accelerated telehealth services, underscored by the potential for cost reductions created by virtual health care. More than half of global insurers said they now offer telehealth across all plans, while 37 per cent identified the addition of these services as the biggest change to their medical portfolios in 2021.
“Telehealth’s momentum will be sustained post-pandemic,” said Francis Coleman, managing director at Willis Towers Watson, in the release. “In fact, the role of telehealth will continue to evolve not only as a navigation tool to speed access to the right care, but also as a means to close gaps in access to care.”
In terms of the most effective method for managing medical costs, the survey found 75 per cent of respondents cited contracted networks of providers for all treatment, followed by pre-approval for scheduled in-patient services (67 per cent). Telehealth, at 63 per cent, moved up from the fifth most effective tool in last year’s survey to No. 3 this year.
The leading driver of medical costs continues to be overuse of care (64 per cent) due to medical professionals recommending too many services or overprescribing, according to the survey. This was followed by excess of care by insured members (59 per cent). And the underuse of preventive services (38 per cent) was also cited as a significant cost driver and increased year over year.
The top three conditions by cost were cancer, cardiovascular conditions and musculoskeletal issues. Notably, survey respondents ranked musculoskeletal as the top condition by incidence of claims this year compared with ranking it fifth in last year’s survey.
“COVID-19 has caused volatility in the trend numbers and in the leading causes of claims, as the sedentary lifestyle that often accompanies working from home has increased the risk of musculoskeletal injuries,” said Coleman. “In addition, as most employers can attest, mental health claims are also on the rise.”