Asean- Global medical costs increased on average by 9.5% in 2017, almost 3 times the estimated inflation rate
- Hong Kong’s ratio was even higher, medical costs growth was 6 times the local inflation rate
- Employers are advised to invest in data analytics and adopt a whole system approach, in order to effectively manage employee health care costs
Mercer Marsh Benefits’ 2018 Medical Trends Around the World survey shows that the growth of global medical cost of private plans continues to outpace the inflation rate. Hong Kong’s medical costs grew by 9% in 2017 compared to 2016, which was six times the local inflation rate of 1.5%. Mercer Marsh Benefits recommends that employers invest in data analytics and adopt a whole system approach, in order to effectively manage employee health care costs. Mercer Marsh Benefits is Marsh & McLennan Companies’ international employee benefits business.
Medical costs growth in Hong Kong was higher than in Singapore and South Korea
Mercer Marsh Benefits surveyed 225 insurers across 62 countries. The survey indicated that the global medical cost in 2017 was increasing at 9.5%, almost three times the inflation rate of 3.4%. Hong Kong’s increment was below the average global level but higher than the other two developed Asian cities, namely Singapore (8.6%) and South Korea (7%).
“Hong Kong’s medical costs significantly outpaced the local inflation rate and employer’s cost on health care continues to grow. Therefore, employers should review the existing design of health care plans, further invest in data analytics and adopt a whole system approach in order to effectively manage employee health care cost,” Billy Wong, Mercer’s Health & MPF Business Leader, Hong Kong said.
“Traditional medical insurance designs are mainly based on receiving crisis treatment in a clinic or hospital setting while seldom involve the principal of encouraging a healthy lifestyle. Adding the preventive elements into the design will help lower the employee health care cost,” Mr. Wong added.
Looking forward, the Medical Trends Around the World survey forecasted that the global medical cost in 2018 will increase by 9.1% while Hong Kong will see a 8.4% growth.
Digitalization in insurance industry helps employers control cost and improve employees’ experience
Given the expectations of today’s workforce for a seamless digital experience, employers and insurers will need to invest in digital and data capabilities with 1 in 6 insurers currently providing no digital claim capability today.
“Health insurance is set for significant digital changes that will benefit clients,” said Andrew Perry, Managing Director, Mercer Marsh Benefits. “The Medical Trends Around the World research validates our thinking that there is a race within the insurer community to collect and use patient data more effectively. If progress is made in this area, it will help companies better address the needs of their employees and achieve the larger goal of a more affordable, quality-focused healthcare system for all.”
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-Ends-
Notes to Editors
The report asked insurers for information on the rising cost of medical care compared to inflation in each market as well as the types, costs and frequency of medical conditions that were claimed for by company employees in 2017. 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 2017, US employers experienced a 2.6% increase in the average total health benefit cost per employee in 2017.
About Mercer Marsh Benefits
Mercer Marsh Benefits provides clients with a single source for managing the costs, people risks and complexities of employee benefits. The network is a combination of Mercer and Marsh local offices around the world, plus country correspondents who have been selected based on specific criteria. Our benefits professionals located in 135 countries and servicing clients in more than 150 countries, are deeply knowledgeable about their local markets. Through our locally established businesses, we have a unique common platform which allows us to serve clients with global consistency and locally unique solutions. Mercer and Marsh are two of the Marsh & McLennan Companies, together with Guy Carpenter and Oliver Wyman.
Table 1: Rates of Medical Inflation around the World: 2018 Survey Results
|
2017 Medical Trend Rate Experienced 1 |
2017 estimated inflation rate † |
2018 Projected Medical Trend Rate 1 |
2018 forecast inflation rate † |
|
Global (average)‡ |
9.5% |
3.4% |
9.1% |
3.5% |
|
North America (average) |
6.2% |
1.6% |
5.6% |
2.2% |
|
Canada |
6.2% |
1.6% |
5.6% |
2.2% |
|
Asia (average) |
10.4% |
2.3% |
10.0% |
2.7% |
|
China |
9.5% |
1.6% |
10.3% |
2.5% |
|
Hong Kong |
9.0% |
1.5% |
8.4% |
2.2% |
|
India |
10.0% |
3.6% |
10.0% |
5.0% |
|
Indonesia |
14.3% |
3.8% |
12.6% |
3.5% |
|
Malaysia |
11.6% |
3.8% |
12.5% |
3.2% |
|
Philippines |
12.4% |
3.2% |
13.1% |
4.2% |
|
Singapore |
8.6% |
0.6% |
9.1% |
1.2% |
|
South Korea |
7.0% |
1.9% |
7.0% |
1.7% |
|
Taiwan |
10.6% |
0.6% |
9.0% |
1.3% |
|
Thailand |
10.0% |
0.7% |
8.7% |
1.4% |
|
Vietnam |
11.8% |
3.5% |
9.4% |
3.8% |
|
Pacific (average) |
4.4% |
2.0% |
3.8% |
2.2% |
|
Australia |
4.4% |
2.0% |
3.8% |
2.2% |
|
Europe (average) |
7.6% |
2.8% |
7.5% |
2.8% |
|
Belgium |
3.7% |
2.2% |
3.8% |
1.6% |
|
Bulgaria |
13.0% |
1.2% |
13.5% |
2.0% |
|
Denmark |
2.0% |
1.1% |
1.7% |
1.4% |
|
France |
1.6% |
1.2% |
1.5% |
1.5% |
|
Greece |
5.7% |
1.1% |
5.1% |
0.7% |
|
Hungary |
10.0% |
2.4% |
15.0% |
2.7% |
|
Ireland |
4.6% |
0.3% |
5.8% |
0.9% |
|
Italy |
2.5% |
1.3% |
2.1% |
1.1% |
|
Latvia |
8.9% |
2.9% |
7.0% |
3.0% |
|
Lithuania |
16.7% |
3.7% |
12.1% |
2.2% |
|
Netherlands |
2.1% |
1.3% |
2.1% |
2.0% |
|
Norway |
9.1% |
1.9% |
7.3% |
1.9% |
|
Poland |
10.1% |
2.0% |
10.7% |
2.5% |
|
Portugal |
2.7% |
1.6% |
2.2% |
1.6% |
|
Romania |
15.0% |
1.3% |
15.0% |
4.7% |
|
Russia |
7.5% |
3.7% |
6.8% |
2.8% |
|
Serbia |
17.5% |
3.1% |
15.0% |
2.7% |
|
Spain |
4.6% |
2.0% |
4.4% |
1.7% |
|
Sweden |
5.0% |
1.9% |
7.0% |
1.5% |
|
Switzerland |
4.5% |
0.5% |
4.5% |
0.7% |
|
Turkey |
12.0% |
11.1% |
14.0% |
11.4% |
|
Ukraine |
11.4% |
14.4% |
11.7% |
11.0% |
|
United Kingdom |
4.6% |
2.7% |
4.9% |
2.7% |
|
MEA (average) |
12.5% |
4.7% |
11.9% |
6.2% |
|
Bahrain |
12.2% |
1.4% |
9.2% |
2.9% |
|
Egypt |
28.4% |
23.5% |
20.0% |
20.1% |
|
Oman |
3.6% |
1.6% |
10.0% |
2.5% |
|
Qatar |
13.5% |
0.4% |
15.0% |
3.9% |
|
Saudi Arabia |
5.5% |
-0.9% |
5.5% |
3.7% |
|
United Arab Emirates |
11.5% |
2.0% |
11.5% |
4.2% |
|
Latin America (average) |
12.7% |
5.9% |
11.5% |
4.7% |
|
Argentina |
32.8% |
24.8%* |
26.0% |
19.3%* |
|
Brazil |
17.6% |
2.9% |
15.4% |
3.6% |
|
Chile |
8.9% |
2.3% |
8.5% |
2.0% |
|
Colombia |
7.5% |
4.1% |
7.4% |
3.8% |
|
Dominican Republic |
4.8% |
4.1% |
5.5% |
3.3% |
|
Mexico |
13.5% |
6.8% |
12.0% |
4.1% |
|
Panama |
10.0% |
0.8% |
10.3% |
0.6% |
|
Peru |
6.5% |
1.5% |
6.8% |
1.2% |
|
1The above medical trend rates reflect insurer survey results and may not be MMB’s view. |
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‡ Average of 50 participating countries with an acceptable number of responses |
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† Sources for inflation rates include: |
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• For all countries unless otherwise noted: International Monetary Fund, World Economic Outlook Database, April 2018 |
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• For Latin America: Mercer's Latin America Economic Trends, April 2018 |
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* Argentina: The source of the inflation data the source is Latin Focus Consensus Forecast. |
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Note for China cities and Mexico cities, the data refer to China and Mexico overall country data respectively. Inflation rate information is strictly for general reference purpose; Mercer gives no guarantees as to their accuracy and will not accept liability for decisions based on them. |
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