Time & Attendance
By Andie Burjek
Sep. 16, 2019
Employer-provided medical costs are expected to rise worldwide in 2020.
Globally, costs for employer-sponsored health plans are likely to increase 8 percent in 2020, according to global professional services firm Aon’s “2020 Global Medical Trends Rate Report.” The survey was conducted among Aon offices across 105 countries. Countries including the United Kingdom and Canada have single-payer health systems but also have employers that still offer employees health coverage and wellness benefits, said Tim Nimmer, global chief actuary for Aon.
Released Sept. 12, the report also stated that the medical trend for the United States is more stable than the global average, with medical benefit costs forecasted to rise 6.5 percent.
Even though these percentages are stable in the U.S., Nimmer said that it’s important to note that despite this stable percentage, the base costs for health care from the dollar perspective will continue to be higher, at least for the foreseeable future.
The Latin America/Caribbean and Middle East/African regions are expected to see increases of 13.1 percent and 12.2 percent, respectively — well above the global average, according to the Aon report.
This is not uncommon, according to Nimmer. “Latin America/Caribbean and and Middle East/Africa regions historically stand out as having a double-digit average gross medical trend,” he said.
Nimmer also said that globally, employers and health plan payers are using many different strategies to mitigate costs. These strategies revolve around “advanced data analytics, including managing consumer behavior to utilize the more cost-effective high quality providers, improving population health, and more effectively managing price increases with providers,” he said.
The top mitigation method is cost containment for Latin America and the Caribbean, the United States and Canada. Meanwhile, the top method is wellness initiatives for Asia Pacific, Europe and Middle East/Africa.
The study also ranked the top five risk factors globally and for each individual region, including the U.S., Latin America and the Caribbean, Asia Pacific, Europe and Middle East/Africa.
Globally the top five leading medical conditions are cardiovascular, cancer, diabetes, high blood pressure and musculoskeletal. A few of these conditions are unique compared to Aon’s 2013 report, which listed the top five conditions as cardiovascular, cancer, respiratory, diabetes and gastrointestinal.
Interestingly, excessive drug and alcohol use was reported as a top risk factor in the United States and no other regions, Nimmer said. The opioid epidemic is one reason for this trend, the report states.
The top risk factors globally, meanwhile, are high blood pressure, physical inactivity, high cholesterol, bad nutrition and poor stress, according to the report. High blood pressure also made the regional list for every area except for North America. The United States and Asia Pacific were the only regions to have obesity as a top five risk factor.
Mercer Marsh Benefits’ “2019 Medical Trends Around the World” report, which likewise explored trends by looking at claims data from 204 insurers across 59 countries, adds a little more insight into what conditions are missing from these top five: mental health conditions.
Overall less than 10 percent of insurers globally reported mental conditions as one of their top three causes of high claims cost. The report speculated that mental health access issues may help explain the low number that we’re beginning to see in increased recognition of the importance of treating mental health conditions.
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