Global medical costs increase on an average of 9.5 per cent in 2017: Mercer Marsh Benefits

Mercer Marsh Benefits finds employer sponsored global healthcare plan costs continue to outpace inflation

New research by Mercer Marsh Benefits, Marsh & McLennan Companies’ international employee benefits business, shows that medical costs of private plans are increasing at almost three times inflation in most major economies.

Mercer Marsh Benefits’ 2018 Medical Trends Around the World surveyed 225 insurers across 62 countries. The survey indicates that employers have an opportunity to better manage healthcare costs and improve outcomes for their people.

According to insurers, only 14 per cent of companies are offering to a very large extent preventive lifestyle programmes for staff. While mental health is now cited as the third highest risk factor, employers are not responding effectively with close to 40 per cent of insurers indicating that employer medical plans provide no access to personal counselling. Employers are encouraged to adopt a whole system approach to wellbeing, in which mental health is recognised alongside physical health, as one of the essential building blocks to help employees fulfil their potential. Furthermore, given the expectations of today’s workforce for a seamless consumer-grade digital experience, employers and insurers will need to invest in digital and data capabilities with one in six insurers currently providing no digital claim capability today.

John Deegan, Senior Partner, Mercer Marsh Benefits said, “As health care costs become more material (outside the US), employers are questioning the intent and design of programmes. Given the digital health revolution underway, we are seeing progressive employers redefine health and benefit principles and question traditional medical insurance designs, many of which were based on receiving crisis treatment in a hospital setting. And while it originated in the US, the rapid evolution towards value-based care where providers are paid based on outcomes instead of fee-for-service, demands innovation from the insurance community.”

Andrew Perry, Managing Director, Mercer Marsh Benefits said, “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.”