The average cost increase for employer-sponsored medical plans globally will fall slightly in 2015 but continue to significantly exceed general inflation levels, says Aon Hewitt.
Its report shows that in 2015, medical costs are expected to increase by 10.15% before plan design changes and vendor negotiations—six percentage points higher than the average inflation rate. In 2014, the global average medical trend was 10.34%.
While the global average medical trend is expected to decline, three regions—Asia Pacific, Europe and Latin America—are projected to see an uptick in rates for 2015.
Cardiovascular issues (76%), cancer (60%) and diabetes (48%) were the most prevalent factors driving healthcare claims around the world. There were, however, a few notable differences by geographic region.
Read:
Canada, for example, reported a higher prevalence of claims related to mental health issues, while Middle East/Africa reported more cases of high blood pressure.
In Canada, there’s been a more significant downward shift in medical inflation than the global average. From about 8% in the mid-2000s, the costs of healthcare claims have been rising by less than 3% for the past two years. This reduction has largely been driven by decreases in drug inflation, as Canadian jurisdictions have implemented legislative changes reducing total drug claim costs, and was the patent rights for well-known brand name drugs have ended.
Non-drug claims, especially paramedical services, as the fastest growing segment in Canada, with inflation rates of nearly 8%. Another factor is that plan designs have generally begun including more cost management features, which have helped mitigate cost increase.
Read:
“In Canada, though the inflation trend is declining, organizations need to be proactive about good plan management so they are prepared for changes in the health and benefits landscape,” says Shawn O’Brien, national business analytics leader with Aon Hewitt Canada. “Canada is not immune to global factors, and growing demand for services, our aging population, unhealthy lifestyle choices and changes in government programs all are risks to future plan costs.”
The global risk factors that are expected to drive future claims—and contribute to the adverse experience driving high medical inflation—include high blood pressure (60%), poor stress management (52%) and high cholesterol (48%). Asia Pacific and Europe also cited poor stress management as a global risk factor, while Canada and Latin America noted obesity.
Also read: