The cost of health benefits for Canadian employers will increase by 9.4 per cent in 2017, according to Willis Towers Watson’s annual global medical trends survey.
That’s higher than the projected global rate (7.8 per cent), as well as the estimated rates for the United States (7.5 per cent) and Europe (less than five per cent). Employers in Latin America and the Middle East and Africa regions will see larger increases than Canadian employers, at 11.5 per cent and 9.8 per cent, respectively.
“Controlling rising medical costs is without question a top priority for insurers and employers around the world,” said Cecil Hemingway, co-head of health and benefits at Willis Towers Watson, in a statement. “While progress is being made in some regions to stem costs, the vast majority of respondents continue to grapple with how to rein them in. And it’s not for a lack of effort or innovation. In fact, more employers are implementing both traditional and innovative approaches to managing rising costs.”
In Canada and the United States, high-cost drugs are a pressing concern. ”As in recent years, employers continue to make changes to their plan designs to keep employee cost increases to a minimum,” the report notes. “But in this prolonged period of relatively stagnant wage growth, they are increasingly concerned about affordability.”
The top three diseases worldwide are cancer, cardiovascular disease and respiratory illness, which insurers don’t anticipate will change in the next five years.
The survey respondents said that globally, the most significant cost-driving factors outside the control of employers and vendors are the high cost of medical technology (63 per cent) and providers’ profit motives (40 per cent). In terms of factors related to employee behaviour, the surveyed insurers pointed to overuse of services because of physicians’ recommendations (74 per cent) and because of employees seeking inappropriate treatment (54 per cent).
The survey also found that wellness and prevention programs are becoming more popular. Globally, 39 per cent of insurers offer them, compared to around half of those in Europe and three-quarters of those in the United States. Yet on a similar note, 31 per cent of insurers worldwide don’t cover treatments for mental health and stress.
“Well-being initiatives hold great promise for addressing non-communicable diseases as well as ones that arise from lifestyle choices such as smoking, poor eating habits and lack of regular exercise,” said Francis Coleman, head of health and benefits, global services and solutions at Willis Towers Watson. “While respondents’ health promotion programs continue to grow globally, we believe insurers can work more closely with employers to better understand employee population health risks and employees’ preferred ways of using them, while providing enhanced metrics and standardized reporting.”