Medical costs in Asia Pacific are forecasted to increase from 8.6 percent in 2019 to 8.7 percent in 2020, according to the 2020 Global Medical Trend Rates Report released by Aon plc.
In Asia, costs are expected to increase the most in Malaysia and Thailand, with average medical trend rates forecasted at 14 percent and 13.9 percent respectively. In Singapore, employer-provided medical benefit costs will increase by 10 percent in 2020, outpacing average general inflation of 1.4 percent. This is due to a combination of factors such as an ageing population and a rise in chronic diseases including diabetes and high blood pressure.
However, projected medical trend rates vary significantly by location. In contrast, China and Hong Kong are projected to see an average medical trend rate increase of 7.5 percent and 8.1 percent respectively.
Due to the adoption of advanced technology, the prices of medical goods and services are increasing at a level two to three times of general inflation. The penetration of mobile applications for online claims management has also contributed to the increase in claims reported by supplemental medical plans in China. In Hong Kong, the medical trend rate is driven by increasing levels of stress and respiratory infections.
Tim Dwyer, CEO of Health Solutions, Asia Pacific, Aon said, “Cost containment strategies are no longer enough to address medical inflation. Organisations in the region must introduce comprehensive programmes that address the physical, emotional, social and financial wellbeing of their employees. A proactive people strategy focusing on all these factors will lead to a healthier, engaged, and more productive workforce.”
Aon’s report confirms the increasing impact of non-communicable diseases on health care costs globally. In Asia Pacific, cardiovascular, cancer, musculoskeletal, ENT and gastrointestinal were the most prevalent health conditions driving health care claims.
“Many of the risk factors lead to chronic conditions with long-term medical costs that make them difficult to treat and result in long-term medical cost increases,” said Tim Nimmer, Aon’s global chief actuary for Health Solutions. “As a large portion of our waking hours are spent on the job, the workplace is a logical place to create a healthier culture and change behaviours. Our goal is to guide employers as they become more critical in helping individuals and their families to take a more active role in managing their health, including participating in health and well-being activities and better managing chronic conditions.”