Cancer and cardiovascular disease are the top two conditions by incidence and cost factors.
Vietnam, 10 April 2020 — Employer-sponsored health care benefit costs are expected to grow at the same rate as last year in Asia Pacific at 7.1% in 2020, according to a survey of medical insurers by Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company. Some markets including China, Hong Kong, India, Indonesia, Malaysia, Singapore and Vietnam have the increase exceed the regional average rate. Vietnam is among the highest where increase rate is projected at 12.1% for 2020.
The 2020 Global Medical Trends Survey, the largest of its kind in the industry, found medical insurers globally are projecting health care benefit costs to continue to rise across the world this year. In Asia Pacific, over one-third (35%) of the insurers expect that medical cost will continue to increase in the next three years.
| 2018 | 2019 | 2020* | |
|---|---|---|---|
| Global + | 6.5% | 6.7% | 6.8% |
| Asia Pacific | 6.8% | 7.1% | 7.1% |
| Australia | 3.4% | 3.7% | 3.2% |
| China | 9.2% | 10.1% | 9.8% |
| Hong Kong | 7.5% | 8.2% | 8.3% |
| India | 11.0% | 11.3% | 12.0% |
| Indonesia | 9.0% | 9.8% | 11.0% |
| Malaysia | 11.9% | 11.6% | 12.6% |
| New Zealand | 7.0% | 7.5% | 6.0% |
| Philippines | 5.3% | 7.9% | 8.2% |
| Singapore | 8.8% | 8.3% | 9.3% |
| South Korea | 3.8% | 4.0% | 4.0% |
| Taiwan | 6.0% | 6.1% | 6.3% |
| Thailand | 8.1% | 9.0% | 9.2% |
| Vietnam | 9.7% | 10.9% | 12.1% |
*Projected
+Global numbers exclude Venezuela
“Controlling rising health care benefit costs remains a top priority for medical insurers and employers. Despite the regional variation in cost increases, they continue to outpace inflation and remain unsustainable, so neither insurers nor employers should be complacent,” said Bui Thi Hoang Yen, Head of Health and Benefits, Vietnam at Willis Towers Watson.
“The on-going pandemic caused by COVID-19 also highlights the need to review how employers manage and deliver health care benefits, not only in normal times, but also during crisis period like this. Organisations can consider adding new benefits into their health care package to cover such disease outbreak. While monitoring medical cost is important, it is also crucial for employers to consider the potential emotional and wellbeing impact to employees. Therefore, it is important take a closer look at the factors driving up costs, and work out the cost containment measures, as well as contingency and business continuity plans, as the outbreak continues,” added Yen.
When asked for the most significant cost-driving factors based on employee and provider behaviour, almost eight in 10 respondents in Vietnam cited the overuse of care by medical practitioners recommending too many services (78%) and insured members’ poor health habits (78%) as the leading drivers. At the same time 44% saw insured members overusing care which placed this as the third condition that pushed up costs. When asked about external factors (out of the control of both employees and providers), the high cost of new medical technology (78%), followed by providers’ profit motives (44%) emerged as the top two leading drivers of medical costs.
According to the survey, cancer (100%) and cardiovascular diseases (78%) remain the top two conditions by cost and are expected to remain so in the near future.
Mental health, a “sleeper condition” where rates are quietly but steadily increasing across Asia Pacific
The potential impact of mental health conditions is getting the attention of insurers and employers all around the globe. The survey also found that Vietnam will see more claims related to mental health conditions over the next five years (from 0% to 11% of insurers reporting an increase).
While insurers in Vietnam expect mental health disorders to become more prevalent in the next three years, about 70% are currently excluding them from standard medical insurance policy.
“Insurers in all regions are anticipating an increase in the demand for mental health services, and this will undoubtedly place upward pressure on costs and challenges to existing health care models. Employers should therefore move their focus beyond programmes to broader organisation factors that play a critical role in supporting mental and emotional wellbeing,” said Yen.
The Willis Towers Watson 2020 Global Medical Trends Survey was conducted between July and September 2019 and reflects responses from 296 leading medical insurers operating in 79 countries. It tracks information about medical costs, what is driving them and how they are being managed, as provided by leading global insurers.
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.
