ARLINGTON, Va., Oct. 06, 2020 (GLOBE NEWSWIRE) — Employer-sponsored health care benefit costs are expected to increase by more than 8% around the globe next year following a year in which the pandemic has had a significant impact on health care utilization and overall costs, according to a survey of medical insurers by Willis Towers Watson (NASDAQ:WLTW), a leading global advisory, broking and solutions company.
The 2021 Global Medical Trends Survey, the largest of its kind, found that medical insurers globally project health care benefit costs will take a sudden drop in 2020 before rebounding to 8.1% in 2021, up from 5.9% this year and 7.2% in 2019. Average increases in the five regions next year will range from 5.8% in Europe to 13.6% in Latin America. Health care benefit cost increases in the U.S. are expected to remain stable at 7.3% next year, according to other Willis Towers Watson research.
The study also found that over two-thirds (67%) of respondents expect medical costs will continue to accelerate over the next three years. Almost 90% of Middle East and Africa insurers expect higher medical trends over the next three years followed by insurers in Europe (77%). Only 40% of Asia Pacific insurers expect a higher medical trend.
Global medical trends: Health care benefit cost growth, 2019 – 2021
+Global and regional trend rates are weighted based on GDP per capita. Due to the hyperinflationary nature of the Venezuelan economy, Venezuela has been excluded from Latin America regional and global totals.
“The pandemic undoubtedly had a major impact on slowing trend increases this year as it sparked a sharp decline in non-urgent surgeries and elective care,” said Francis Coleman, managing director, Willis Towers Watson. “While most, but not all, countries experienced a decrease in trend this year, that is expected to be short-lived. In fact, we expect to see significant volatility in 2021 results, which are dependent on the impact of COVID-19 and whether a vaccine becomes available early in the year, who pays for it and the extent of its availability. In addition, there is uncertainty about how COVID-19 testing and treatment costs for 2021 will continue to be split between government, insurers and employers.”
According to the survey, cancer (80%), cardiovascular diseases (56%), and conditions affecting musculoskeletal and connective tissue (41%) are the top three conditions currently affecting medical costs. Interestingly, about four in 10 respondents predict mental health conditions will be among the three most common conditions affecting costs within the next 18 months (40%), and among the three most expensive in the next 18 months (39%).
When asked for the most significant cost-driving factors outside the control of employers and vendors, just over half of respondents (51%) cited the high cost of medical technology, followed by providers’ profit motives (36%) and epidemics and global pandemics (34%).
“Further uncertainty around medical trend lies ahead as we start to see the true impact of delayed treatment in 2020 and the long-term effects on those who contracted COVID-19. Nevertheless, COVID-19 has greatly accelerated the adoption and use of telehealth, which could help to offset those potential higher costs and provide a more efficient way for insureds to access and use health care in the future; however, it may also boost utilization due to ease of access and add to overall costs,” said Emma Tekstra, managing director, Willis Towers Watson.
About the survey
The Willis Towers Watson 2021 Global Medical Trends Survey was conducted between July and September 2020 and reflects responses from 287 leading medical insurers operating in 76 countries.
About Willis Towers Watson
Willis Towers Watson (NASDAQ:WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.
Ed Emerman: +1 609 240 2766