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Survey Report

2019 Global Medical Trends Survey Report

November 2, 2018

The Global Medical Trends Report provides insights on medical costs across the globe, what is driving them and the cost management techniques employers are using to manage them.
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While global medical trend remains relatively stable and is generally experiencing only modest increases, there are enough exceptions to be a source of genuine concern. For 2019, the projected global, weighted medical trend is 7.6%, which continues to outstrip general inflation by a factor of more than 2:1 on a global basis. However, this value is just 0.5% higher than the reported value for 2018, with no increase at all expected in Europe. Despite the relative global stability, it is concerning to see how the trend continues to edge upwards in some of the larger, more significant medical markets such as Brazil, China, India, Mexico and the U.A.E. The largest increases are expected to be seen in the Middle East and Africa where the regional trend increased from 8.5% to 9.9% in 2018 and is projected to rise to 12.4% in 2019.

Other regions show closely guarded optimism, with most predicting either medical trends will stay the same or increase by conservative amounts. There are continuing concerns about the manner in which treatment is provided, with fears that it is not being directed on the basis of strict medical need. Respondents also expressed misgivings about reliance on pharmacy services and the cost implications of innovative future treatments.

To further darken prospects for the future, there are several conditions that are projected to represent significant sources of claims. Alongside circulatory conditions and cancer, which are illnesses that most industry experts would expect to appear, are mental and behavioral disorders.

How do you expect the medical trend in your overall book of business to change over the next three years compared to current rates?
How do you expect the medical trend in your overall book of business to change over the next three years compared to current rates?

The 2019 Global Medical Trends Survey Report is the latest in over a decade of research by Willis Towers Watson on global medical trends. The survey was conducted from July through September 2018, with responses received from 307 leading insurers from 77 countries. Global results presented here have been weighted using GDP per capita. The U.S. medical trend data is drawn from other Willis Towers Watson research on this highly developed market with unique characteristics.

Key findings

  • Europe continues to have the lowest level of gross medical trend increase for private medical insurance, substantially due to the existence of socialized medicine and the integration of treatment with private plans. While this helps manage costs in some of the largest countries such as France, Spain and the U.K., it is not universal across all of Europe. For some countries, such as Hungary, we continue to see a public health care system under much greater strain, which results in more patients utilizing the private sector.
  • Insurers are predicting that pharmacy costs will become an increasingly significant part of medical expenses over the next five years. Sixty-six percent of insurers in the Americas foresee a moderate increase in pharmacy expenses in the next year, while 52% of insurers in Asia Pacific agree.
  • Overuse of services and care are identified as being the top two factors driving medical costs per person. Seventy percent of insurers worldwide identified an overuse of care due to medical practitioners recommending too many services, while 52% of insured members were seen to be overusing available care.
  • The high cost of new medical technologies is increasing medical costs. Sixty-five percent of insurers thought this was among the three most significant causes, with a further 48% identifying profit motive of providers as a main cause. While there is fear about the rising incidence of large scale claims affecting the insurance industry, only 15% identified it as among the three leading causes of higher costs.
  • Few surprises come with the identification of the top three conditions that cause the highest incidence of claims and the highest cost of claims in medical client portfolios. Circulatory, musculoskeletal and cancer are the leading causes, with 54% of respondents worldwide identifying circulatory conditions as the leading cause and 49% identifying musculoskeletal conditions as the leading cause — a dramatic rise from preceding years. Cancer was identified by 42% of respondents as causing the most claims.
  • Cancer continues to be the most expensive condition in each of the four regions. The lowest figure was the 68% of insurers in the Americas who placed it among the top three conditions and the highest was 82% for the Middle East and Africa, in excess of the figures for circulatory conditions, the second placed in the hierarchy. There were 67% of insurers in the Asia Pacific region who rated circulatory conditions among the top three most costly conditions, the highest total for non-cancer related illnesses.
  • While cardiovascular conditions and cancer are generally expected to cause the highest incidence of claims around the world, excluding maternity, the incidence of mental and behavioral disorders are expected to increase over the next five years. In Europe, 44% of insurers identified mental disorders as being among the top three conditions in the next five years, with 33% of insurers globally agreeing. This perhaps reflects that symptoms are not yet widely recognized by medical professionals and that many insurers do not cover mental disorders.
  • From a cost perspective, there should be no change in the top conditions. 79% of insurers globally expect cancer to be the most costly health condition, with circulatory conditions some way behind on a global average of 59% and musculoskeletal conditions further behind on 50%.
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2019 Global Medical Trends Survey Report PDF 5.2 MB
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