Shift in Global Medical Costs: insights from the WTW 2024 Global Medical Trends Survey
The landscape of global medical expenses is undergoing significant changes. The WTW 2024 Global Medical Trends Survey, encompassing insights from 266 insurers across 66 countries, provides critical data on these shifts.
This comprehensive study highlights key trends in medical costs, including a projected near double-digit increase in 2024, albeit a decline from the 2023 highs. Let’s delve into the factors influencing these trends and their implications.
Decline in Medical Cost Trends
After reaching a historic high in 2023, with medical trend rates soaring into double digits for the first time, the 2024 projection indicates a slight relief. The global average for medical costs is expected to dip to 9.9% in 2024, down from 10.7% in 2023.
This decrease is attributed to the easing of pandemic-induced delays in elective procedures and consultations, along with a global inflation slowdown.
Regional Variations and Influencing Factors
The survey reveals diverse regional trends. Europe is expected to see the most significant drop, from 10.9% in 2023 to 9.3% in 2024. However, challenges like high costs in Eastern Europe and Turkey contribute to Europe’s still elevated medical trend.
Conversely, the Middle East and Africa anticipate a slight increase from 11.3% to 12.1%.
The Cost of New Medical Technologies
One of the primary drivers of elevated medical costs is the expense associated with new medical technologies. Innovations ranging from AI-powered diagnostic tools to advanced gene therapies contribute significantly to healthcare spending, particularly in the Asia Pacific region.
Overuse of Care and Its Impact
Insurers express concern over the overuse of care, a leading factor in rising medical costs per person. The survey indicates a positive shift, with the percentage of insurers viewing this as a significant cost driver declining from 74% in 2022 to 59% in 2023.
Despite the near-term improvement, over half of the insurers surveyed (58%) expect medical costs to increase significantly over the next three years. This trend is particularly pronounced in the Middle East and Africa, with 84% of insurers anticipating higher healthcare cost increases.
Key Medical Conditions Influencing Costs
Musculoskeletal disorders and mental health issues are leading conditions impacting medical costs. The pandemic’s influence on lifestyles has exacerbated these conditions, with mental health disorders expected to remain among the top fastest-growing conditions by cost and claims.
The Role of Telehealth
Telehealth services continue to gain momentum, with 40% of insurance organizations globally adding these services in 2023. This expansion into virtual care is not only redefining healthcare delivery but also presenting opportunities for cost management, especially in mental health care.
Exclusions in Healthcare Programs
The survey highlights the impact of exclusions in healthcare programs on employee wellbeing and DEI initiatives. These exclusions, including treatments for drug and alcohol abuse and gender-affirming care, present significant barriers in regions like Asia Pacific and the Middle East and Africa.
The Pressure on Public Healthcare Systems
A decline in the quality and funding of public healthcare systems is increasingly driving private medical costs. The backlog of scheduled procedures and a reduction in medical practitioners contribute to the growing demand for private healthcare.
The WTW 2024 Global Medical Trends Survey offers vital insights into the evolving landscape of medical costs.
While a near-term decrease in medical trend rates is encouraging, long-term challenges, driven by new medical technologies and varying regional trends, remain. Understanding these factors is crucial for stakeholders in the global healthcare industry.