Mercer Marsh Benefits 2019 Medical Trends Around the World - Overview

This year’s report has highlighted a striking rise in medical costs over 2018, coming in at a global average of 9.7%, nearly 3x the rate of general inflation across the globe. A comparable increase is expected to be seen over this year, and an even higher change is likely to be seen over 2020.

This constant increase is, of course, driving up the price of international health insurance schemes around the globe causing additional strain on corporate and personal finances alike. The report, now in its fifth year, surveyed 2013 insurers in 59 countries to assess how health conditions, suppliers and consumer habits are pushing this increased cost.

What are the problems?

Across the globe, the primary risks reported to contribute towards continually declining health are those metabolic and cardiovascular in nature. This is the same for every region outweighing occupational, environmental and dietary risks, which all vary in severity around the world. Mental and emotional risks are now being taken more seriously than ever and can these can become extremely significant stressors for chronic conditions, however, there is still much stigma attached to these in all the regions surveyed.

For this reason, it is still believed that mental health issues are significantly underreported, and may cause a much larger risk than we currently know or can appreciate. Mental health studies from Hong Kong and the United Kingdom both place the incidence formally diagnosed poor mental health at around 1/3 of the workforce, although suspect that the real number may be much higher.

Where does the money go?

The causes of rapidly increasing medical costs vary across the globe, with a mixture of high pharmaceutical costs, the use of new diagnostic techniques and procedures, and the overuse of low-value tests and procedures all playing major roles. North America, in particular, is currently in the middle of a pharmaceutical pricing crisis, with the costs of essential, although basic, drugs like insulin seeing giant price hikes to around 300% of their cost in Europe or even Canada. Clearly there needs to be some governmental intervention in these cases to help keep costs down for individuals, corporates and health insurers to ensure the continued viability of this market.

On the opposite end of the spectrum, the Middle East and Africa are both seeing medical costs increase due to the vast overuse of health procedures and diagnostic techniques that have little or no value for the patient. This highlights the requirement for better education within the healthcare industry to ensure that value is provided for patients and also the need to make individuals smarter healthcare consumers. These customers will then be able to make more informed decisions that will health them to higher-quality and more effective healthcare providers.