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Survey Report

2023 Global Medical Trends Survey

Executive summary and key findings

October 12, 2022

The 2023 survey tracks medical costs from a global network of 257 insurers in 55 countries. Explore key findings and trends at a glance.
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Rampant inflation and increased healthcare utilization coming out of the pandemic are contributing to the highest projected increase in global medical costs in nearly 15 years. The 2023 Global Medical Trends Survey reveals that after rising from 8.2% in 2021 to a higher than anticipated 8.8% in 2022, the healthcare benefit cost trend for 2023 is projected to remain at a stubbornly high global average of 10%.

Costs are expected to continue rising in many regions (Figure 1). These include Latin America where average increases are projected to climb from 18.2% to 18.9% as well as Asia Pacific where the rate of increase is expected to jump from 6.9% to 10.2%. In addition, it is anticipated that medical trend in the Middle East and Africa will increase from 10.5% to 11.5%.

Even Europe, which has traditionally seen much lower levels in the past, is not excluded from the record levels of trend. For 2023, the Europe trend is expected to increase to 8.6%, which is a significant jump over 2021 levels (5.6%). The one region where a decrease in trend is expected is in North America, projected to drop from 9.4% in 2022 to 6.5% in 2023. While this would be welcome news, U.S. employers in particular are not necessarily seeing this impact them yet and remain very concerned on cost and volatility — despite the fact that inflation overall may be abating for the coming year.

Figure 1. Global Medical Trends, Global and by Region

 **Net of general inflation (inflation rates from IMF World Economic Outlook, Apr 22)
†Global and Latin America numbers exclude Venezuela
 
Gross Net**
2021 2022 2023 (projected) 2021 2022 2023 (projected)
Global† 8.2 8.8 10.0 5.0 3.1 6.5
Latin America† 15.1 18.2 18.9 6.3 7.1 10.5
North America 9.1 9.4 6.5 5.3 3.1 4.0
Asia Pacific 9.8 6.9 10.2 7.3 3.2 7.6
Europe 5.6 8.0 8.6 2.7 2.0 5.4
Middle East and Africa 12.4 10.5 11.5 10.5 5.7 7.2

Medical costs are expected to continue to accelerate

Medical costs are expected to continue to accelerate beyond 2023. Over three-quarters of health insurers (78%) anticipate higher or significantly higher medical trend over the next three years. Eighty-four percent of insurers in Europe expect higher or significantly higher medical trend during this time period, as do 73% of insurers in Asia Pacific, 69% of insurers in Latin America and 60% of insurers in the Middle East and Africa.

The pandemic highlighted the health disparities among different employee groups, prompting employers to place a greater emphasis on diversity, equity and inclusion (DEI) in their healthcare benefit strategy. To raise insurers’ awareness of this issue, the complete report will include a special section on DEI and healthcare coverage gaps in areas related to DEI.

Key findings

  • Incidence of musculoskeletal disorders remains high

    Respondents once again ranked musculoskeletal disorders as the top condition by incidence of claims. This finding likely reflects the ongoing impact of poor ergonomics in employees’ home working environment combined with reduced levels of physical activity during the pandemic.

    Cancer, which is predicted to be the fifth leading condition in terms of incidence of claims in 2022, moves up to the second spot in 2023, which is not surprising and is reflective of the impact of Covid on delayed access to diagnosis and care. Cancer remains the top condition affecting medical costs, followed by musculoskeletal and cardiovascular disorders.

    Mental health conditions such as anxiety and depression continue to take a toll on employees. Insurers ranked mental and behavioral health disorders as the fourth leading condition by both incidence of claims and cost. In our 2022 study, mental and behavioral disorders were ranked among the top five conditions by cost but not by incidence of claims. Respondents expect mental and behavioral disorders to be among the top five fastest-growing conditions by both incidence of claims and cost in the next 18 months.

  • Coverage gaps may hamper DEI initiatives

    Exclusions persist for conditions in areas related to DEI, a key priority and board-level issue in many organizations. These exclusions range from fertility treatments and gender reaffirming surgery to midwives and HIV/AIDS treatments. Employers have an opportunity to work with their consultants and brokers to bridge these coverage gaps and help deliver more equitable health outcomes across different employee groups.

  • Telehealth continues to gain traction in health delivery and in cost management

    Insurers ranked contracted networks of providers (70%) as the top cost management method. Telehealth continues to gain ground as a means of managing medical costs, moving up from number three in last year’s survey to number two this year. A notable shift over prior year occurred in the area of preapprovals for scheduled inpatient services, which dropped from number two (67%) last year to number five (52%) this year.

  • Concern about overuse of care increases

    The percentage of insurers most concerned about providers driving up costs by recommending too many services rose from 64% in 2021 to 75% in this year’s study. In addition, more insurers are concerned about the impact of insured members’ poor health habits on healthcare costs. Over half of insurers (52%) currently indicate that insured members’ poor health habits are among the top factors affecting medical costs per person, up from 35% in the prior year.

  • Broader external factors influence medical costs

    Consistent with previous surveys, the high cost of new medical technologies (62%) and the profit motives of providers (35%) continue to be the key factors affecting medical costs. But in this year’s survey, insurers also cite broader issues that influence these costs including the decline in the quality or funding of public health systems (27%) and geopolitical conflicts (19%). These findings provide a more comprehensive picture of the range of external factors that impact medical costs.

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