Some markets will continue to see double-digit growth in medical trend
| 2022 | 2023 | 2024 (projected) |
|
|---|---|---|---|
| Global | 7.4% | 10.7% | 9.9% |
| Asia Pacific | 7.2% | 9.9% | 9.9% |
Gross medical trend in 2024 (projected)
- Philippines: 13.9%*
- Malaysia: 13.4%*
- Indonesia: 12.7%*
- South Korea: 11.7%*
- Vietnam: 11.3%*
- Singapore: 10.7%*
- India: 10.5%*
- Australia: 9.5%
- Thailand: 9.3%
- New Zealand: 8.5%
- China: 8.4%
- Hong Kong: 8.4%
- Taiwan: 6.3%
* Markets with a higher trend than the Asia Pacific regional average
Almost 6 in 10 insurers also anticipate higher or significantly higher medical trend over the next three years.
What’s driving the cost increase?
External factors
- Higher costs due to new medical technologies: 62%
- Plan design with little or no cost-sharing: 35%
- Plan design with limited cost-sharing is less of a concern globally (19% versus 35%)
- Profit motives of providers: 33%
- Changes in employee demographics: 27%
Insured members/provider behaviour
- Overuse or misuse of care due to medical practitioners recommending too many services: 72%
- Globally, this factor has declined since 2022 (from 74% to 59%) — but in Asia Pacific it remains high.
- Insured members’ poor health habits: 50%
- Overuse or misuse of care due to lack of integration between primary, specialty and facility care: 44%
- Underuse or lack of preventive services: 39%
Top three conditions in 2023 – by costs, currently and in the next 18 months
- Cancer (neoplasms)
- Circulatory system (cardiovascular)
- Musculoskeletal and connective tissue
Top three fastest growing conditions over the next 18 months by incidence
- Circulatory system (cardiovascular)
- Cancer (neoplasms)
- Digestive system (gastrointestinal)
Mental health is one of the fastest-growing conditions globally — but it doesn’t make the top five in Asia Pacific. Could this be due to social stigmas and policy exclusions?
Managing the medical trend
How do you help clients effectively manage medical costs?
- Contracted networks of providers: 67%
- Annual limit per policy period (annual max sum insured): 65%
- Limits on certain services: 56%
- Promotion of preventive services: 53%
- Preapproval for scheduled inpatient services: 51%
- Targeted communication and/or educational campaign to address key claim drivers: 47%
- Chronic condition or disease management programmes: 42%
DEI-related coverage is more likely to be excluded from Asia Pacific programmes than globally
| Global | Asia Pacific | Gap (percentage-point) | |
|---|---|---|---|
| Fertility treatments | 67% | 75% | 8 |
| Gender re-affirming care (surgery/sex change, hormonal therapy, mental care) | 57% | 74% | 17 |
| Other mental and behavioural health including but not limited to autism, ADHD and so on | 34% | 52% | 18 |
| Treatments related to menopause | 29% | 44% | 15 |
| Mental and behavioural health | 22% | 32% | 10 |
Next steps for employers
- Conduct a programme review and identify gaps to analyse if coverage is the right fit and assess the inclusiveness of programme
- Optimise communications so that employees understand what is available, when and how to use what coverage
- Use data and analytics to understand health risk and key drivers specific to your organisation and take more targeted actions
- Prioritise wellbeing by setting a clear corporate strategy or direction and ensuring benefits are accessible to all employees
