MMB survey forecasts Philippines’ medical inflation rate as among the highest in Asia

MMB survey forecasts Philippines’ medical inflation rate as among the highest in Asia

Mercer Marsh Benefits™ survey forecasts Philippines’ medical inflation rate as among the highest in Asia

  • June 10, 2019
  • Philippines,
  • Medical inflation rate in the Philippines projected to rise to 13.7% in 2019, second highest in Asia next to Vietnam’s 14.2%
  • Around the globe, medical costs continue to outpace general inflation by close to 3x
  • Top five drivers of medical costs in Asia are metabolic and cardiovascular risk, occupational risk, environmental risk, dietary risk, and emotional/mental risk
  • Insurers respond with investments in quality-focused healthcare solutions and programmes
  • 78% of insurers globally support or consider supporting virtual health consultations to manage member health and contain cost

As the cost of health benefit programmes continues to rise globally, employers have the opportunity to contain cost through smarter plan design and employee access to quality-focused healthcare. According to the Mercer Marsh Benefits 2019 Medical Trends Around the World report, medical costs continue to outpace general inflation by close to 3x with the global average 9.7% in 2018. A similar increase is expected for 2019 and even higher for 2020.

In its fifth year, this latest report surveyed 204 insurers across 59 countries*, assessing how health conditions, supplier factors and consumer habits are driving cost, as well as providing insights into how insurers are responding.

Primary drivers of the high rate medical inflation rates around the globe are high-cost pharmaceuticals, new diagnostics and procedures, and overprescribing of low-value health tests and procedures.

Globally, the top three health risk factors influencing medical cost remain metabolic and cardiovascular risk, dietary risk and emotional/mental risk. On a regional level, there is variation in the top risk factors (see also Table 1):

  • Latin America: dietary risk (85%)
  • Europe: emotional or mental risks (61%)
  • Middle East and Africa: occupational risks (59%), childhood and maternal under-nutrition (24%)
  • Asia: environmental risks (52%) - as the effects of high pollution levels in many of the region’s major cities take their toll

In response, the number of insurers investing in initiatives to enable quality-focused care, to better guide members to the right care options for them more quickly, has more than doubled. Globally, 29% now name this type of investment as a top strategic priority. Insurers are responding by helping members make smarter healthcare choices with 63% of insurers providing education, tools and incentives to drive positive behaviour. The Middle East and Africa had the highest rate of adoption of programmes of this type, with 71% of insurers proactively using such consumer-focused tactics with plan members. Globally 78% are now considering or already support virtual health consultations.

“The gap between medical inflation and actual inflation continues in the Philippines. Companies must make employer-sponsored medical plans competitive, and prioritize solutions that will provide quality healthcare in the long-term,” said Teng Alday, Chief Executive Officer (CEO), Mercer Philippines, and Health Business Leader, Marsh Philippines.

“It is clear that health is a business imperative. Supporting and nurturing the physical, emotional, financial, and social well-being needs of employees returns many benefits to businesses.

“With the future of work demanding a healthy and engaging environment for employees, it is critical that companies assess how medical plans can be reviewed through both cost optimization and employee engagement lenses,” she continued.

To download a copy the report, please click here.

*Excludes the US.

Table 1: Insurers were asked to highlight the 3 risk factors that most influence employer sponsored group medical costs

 

Rank

Global

Asia

Europe

Latin America

Middle East, Africa

Metabolic and cardiovascular risk

1

91%

88%

92%

97%

88%

Dietary risk

2

56%

41%

51%

85%

71%

Emotional/Mental risks

3

44%

29%

61%

45%

12%

Occupational risk

4

43%

52%

42%

18%

59%

Environmental risk

5

30%

52%

19%

18%

24%

Tobacco smoke

6

22%

17%

27%

24%

24%

Childhood and maternal under nutrition

7

6%

5%

5%

0%

24%

Alcohol and drug abuse

8

5%

11%

3%

0%

0%

Traffic, violence and safety

8

5%

8%

0%

12%

0%

The report asked insurers for information on the rising cost of medical care in each market as well as the types, costs and frequency of medical conditions that were claimed for by company employees in 2018. As Mercer’s research parameters for the two reports are different, US data has been excluded from this release; however according to Mercer’s National Survey of Employer-Sponsored Health Plans 2018, US employers experienced a 3.6% increase in the average total health benefit cost per employee in 2018. 

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