Press Release

Rising health care benefit costs continue to be a concern in Thailand, Willis Towers Watson survey finds

August 28, 2017
| China, Hong Kong, India +4 more
  • Indonesia
  • Malaysia
  • Philippines
  • Thailand
  • Asia Pacific’s cost of health care benefits continues to accelerate.
  • Cost of health care benefits in Thailand rose by 11.4% in 2016 and is projected to rise by a further 9.2% in 2017.
  • The key cost drivers continue to be advanced medical technology and the overuse and overprescribing of services.

Bangkok, 28 August 2017 — The cost of employer-provided health care benefits in Asia Pacific continues to climb with little relief in sight, according to a survey of medical insurers by Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company. Insurers attribute the bulk of the cost increase to advanced medical technology, and the overuse and overprescribing of services.

The 2017 Willis Towers Watson Global Medical Trends Survey found that medical insurers in Asia Pacific are projecting the gross cost of health care benefits to rise 8.6% this year (see Table 1 below). Globally, the projected increase is 7.8%. In the region, India (20.0%), Indonesia (11.0%) and Malaysia (15.0%) are leading the upward cost trend, with Thailand projected to increase at 9.2% - above of the regional average. Furthermore, the outlook for reining in costs in the near term is not optimistic. Half of all insurers in Asia Pacific expect higher or significantly higher medical trend costs over the next three years.

Table 1. Asia Pacific medical gross cost trend

  2015 2016 2017 (projected)
Thailand 9.0% 11.4% 9.2%
Asia Pacific 7.1% 7.7% 8.6%
Global1 7.5% 7.3% 7.8%
1 Global and regional trend rates are weighted averages based on GDP per capita.

 

When asked what are the most significant cost-driving factors outside the control of employers and vendors, almost three-quarters (71%) cited the high cost of medical technology, followed by medical providers’ profit motives (47%). Nearly three-quarters of insurers (73%) ranked overuse of care due to medical practitioners recommending too many services as the most significant factor driving costs related to employee and provider behaviour. Almost half (46%) cited overuse of care due to employees seeking inappropriate care.

“Controlling rising medical costs is without question a top priority for insurers and employers in the region. In Asia, employers have to deal with many factors that contribute to this cost over and above global drivers — for instance, medical tourism or an unregulated private medical sector,” said Cedric Luah, Head of Health & Benefits, Asia and Australasia at Willis Towers Watson. “While progress is being made to stem costs, the vast majority of respondents continue to grapple with how to rein them in. It’s not for a lack of effort or innovation that this continues to be a struggle.”

Managing the medical trend

More employers are implementing both traditional and innovative approaches to manage rising costs. According to the survey, requiring pre-approval for scheduled inpatient services, placing limits on certain medical services and using contracted networks of providers are cited as the most effective tools to help manage costs.

“In 2016, many companies in Thailand saw significant increases in their health care benefit costs” said Chris Mayes, Head, Health & Benefits, Thailand at Willis Towers Watson. “This is reflected in the medical trend rate, with Thailand insurers reporting that the actual rate of increase for 2016 (11.4%) was in excess of what they projected at the beginning of the year (10.8%).”

“To understand — and try to rein in — medical costs, employers should understand what drives them, and then think about solutions,” said Mayes. “Part of this will be considering how benefits are designed and delivered. For instance, by putting into place limits on services or pre-approvals, insurers are attempting to bring back greater control and minimise the unpredictability of cost. It’s encouraging that the top cost management methods that are seen as effective do in fact address what is driving costs in Asia including Thailand. It’s therefore important that employers continue to push their insurance partners to provide such elements of design and delivery in their medical benefits.”

Wellness — another piece of the puzzle

Health promotion programmes are also gaining traction. Nearly two in three respondents (65%) now offer (either directly or through a partner) personal health risk assessments with another 10% planning to do so next year. Second medical opinions are offered by 49% with another 18% planning to do so. Notably, almost six in 10 (57%) insurers offer lifestyle and health education programmes, and these are expected to grow to nearly 79% next year.

“Wellness programmes can provide another piece of the puzzle by promoting behaviour change. They not only hold great promise for addressing non-communicable diseases, they can also address ones that arise from lifestyle choices impacting Asian employees such as smoking, poor eating habits and lack of regular exercise,” said Luah. “While respondents’ health promotion programmes continue to grow in Asia Pacific, we believe insurers can work more closely with employers to better understand employee population health risks and employees’ preferred ways of using them, while providing enhanced metrics and standardised reporting.”

Other findings from the survey include:

  • Non-communicable diseases. Insurers in Asia Pacific report cancer (82%), cardiovascular disease (72%), and musculoskeletal/back illness (44%) as the top three diseases.
  • Having good quality data and using it properly is important for companies in managing medical costs. Respondents in Asia Pacific are most likely to receive high-level claims or detailed claim data identified by top 10 causes or medical conditions.
  • Managing stress. Concerns about employee stress continues to rise. While 61% of insurers globally now include treatment for mental health and stress in their standard medical insurance programmes, only 36% in Asia Pacific offer such coverage. Mental health remains an exclusion in many countries in the region.  The good news is that 7% answered they are planning to offer stress-related programmes in the next 12 months.

About the survey

The 2017 Willis Towers Watson Global Medical Trends Survey was conducted between October and November 2016, and reflects responses from 231 leading medical insurers operating in 79 countries, including 50 insurers from 14 countries in Asia Pacific.

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 40,000 employees serving more than 140 countries. 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.