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World Healthcare Costs Expected to Jump 9.1% in 2016

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Health care costs will continue to rise worldwide in 2016 according to the Willis Towers Watson (WTW) 2016 Global Medical Trends Survey of 174 insurers in 55 countries, employers in 34 countries, and 30,000 employees worldwide who have employer-sponsored health benefits.

As private medical insurance costs continue to rise, from 7.5% in 2014 and 8.0% in 2015 to a projected 9.1% in 2016, WTW noted that more than half of health insurers in all regions surveyed are not optimistic about the future, and expect the trend to be higher to significantly higher over the next three years.

Particularly troubling are increases in the Americas (with the exception of the United States, which was not included in this survey), especially in Venezuela, where hyperinflation is the driving factor of a 150% jump in health care costs (2015). Other Latin American countries, according to the survey, face 10-18% increases, as does Russia (15%), although Europe has the lowest rate of gross medical trend increases at 5.2%

Asia Pacific saw increases influenced by a 15% rate of increase in Malaysia and 11% in India, where costs are actually holding fairly steady since 2009 after India’s health insurance system underwent reform. Costs in the Middle East and Africa region rose 10.3% in 2014, to 12.6% in 2015 largely due to sharp increases in Nigeria (35%), Mozambique (30%), and Angola (20%).

Survey respondents identified the four most significant factors driving medical costs (employee/provider behavior) as:

  • “Overuse of care due to medical practitioners recommending too many services.” (75%)
  • “Overuse of care due to employees seeking inappropriate care.” (45%)
  • “Employees’ poor health habits” tied with
  • “Under-use of preventive services.” (35% each.)

Other factors were identified as “Poor quality or misuse of care because primary, specialty, and facility care are not integrated”; “Poor understanding of how to use the plan”; and “Insufficient information on employee/provider behavior.”

The study underscores the need for employers to have consistent employee health data, as well as a globally-consistent coding system such as ICD-10 and the availability of detailed claim data (not just top-level data) to help employers make informed decisions when developing access to health care for their employees.

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