Costs of PH health­care ben­e­fits ex­pected to in­crease in 2019

Manila Bulletin - - Business News - By MADELAINE B. MIRAFLOR

Em­ployer-pro­vided health care ben­e­fits costs are ex­pected to in­crease from 10.3 per­cent this year to 11.5 per­cent in the Philip­pines in 2019.

This was ac­cord­ing to a sur­vey of med­i­cal in­sur­ers by Willis Tow­ers Wat­son, a lead­ing global ad­vi­sory, broking and so­lu­tions com­pany.

The sur­vey, called the 2019 Global Med­i­cal Trends Sur­vey, said a few mar­kets – in­clud­ing the Philip­pines, In­dia, China and Malaysia – ex­pect to see a cost in­crease of more than 10 per­cent in 2019 in terms of health­care.

In­sur­ers blame the high cost of med­i­cal tech­nol­ogy and the overuse and over­pre­scrib­ing of ser­vices as the ma­jor cost-driv­ing fac­tors, and cau­tion that soar­ing hos­pi­tal/in­pa­tient and phar­macy costs will be­come sig­nif­i­cant fac­tors over the next five years.

In ad­di­tion, the pro­jected cost trend for 2018 in the Philip­pines was sig­nif­i­cantly higher by close to 20 per­cent than what in­sur­ers pro­jected the year be­fore, as a re­sult of the un­ex­pected in­crease in gen­eral in­fla­tion.

Econ­o­mists have a va­ri­ety of as­sump­tions re­gard­ing the in­crease in the Con­sumer Price In­dex (CPI). His­tor­i­cally, med­i­cal in­fla­tion is roughly four per­cent­age points higher than CPI.

“The re­al­ity on the ground for many em­ploy­ers is that ris­ing health care costs con­tinue to be a ma­jor is­sue, and are un­sus­tain­able over the long term,” said Su­san La Chica, Head of Health & Ben­e­fits, Philip­pines at Willis Tow­ers Wat­son.

“To bet­ter con­trol costs, many em­ploy­ers are tak­ing a close look at how they de­sign and de­liver health care ben­e­fits. There are also fun­da­men­tal con­cerns over how med­i­cal treat­ment is be­ing pro­vided and con­sumed, and the cost im­pli­ca­tions of in­no­va­tive fu­ture treat­ments, all of which can fuel sharp cost in­creases down the road," she added.

When asked for the most sig­nif­i­cant cost-driv­ing fac­tors out­side the con­trol of em­ploy­ers and ven­dors, nearly twothirds (60 per­cent) of the in­sur­ers in the re­gion cited the high cost of med­i­cal tech­nol­ogy, fol­lowed by providers’ profit mo­tives (37 per­cent).

More­over, eight in 10 in­sur­ers (83 per­cent) ranked overuse of care due to med­i­cal prac­ti­tion­ers rec­om­mend­ing too many ser­vices as the most sig­nif­i­cant fac­tor driv­ing costs re­lated to em­ployee and provider be­hav­ior. Just over half (53 per­cent) cited overuse of care due to em­ploy­ees seek­ing in­ap­pro­pri­ate care.

“While cost man­age­ment re­mains crit­i­cally im­por­tant, we ex­pect that more struc­tural changes may be needed around how med­i­cal ser­vices are con­sumed and pro­vided,” said La Chica.

“In many in­stances, costs are driven by overuse of care, whether this is due to an in­crease in life­style-re­lated chronic con­di­tions or over-cau­tious­ness of med­i­cal prac­ti­tion­ers that re­sult in un­nec­es­sary treat­ments or di­ag­nos­tic pro­ce­dures rec­om­mended by ser­vice providers," she added.

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