Thursday, May 15, 2014
Tweet[IWS] Towers Watson: 2014 GLOBAL MEDICAL TRENDS SURVEY [15 May 2014]
IWS Documented News Service
_______________________________
Institute for Workplace Studies-----------------Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor--------------------Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
This service is supported, in part, by donations. Please consider making a donation by following the instructions at http://www.ilr.cornell.edu/iws/news-bureau/support.html
Towers Watson
2014 GLOBAL MEDICAL TRENDS SURVEY [15 May 2014]
or
http://www.towerswatson.com/DownloadMedia.aspx?media={9CEE5D6D-9042-496B-A1C2-46B55DF68005}
[full-text, 14 pages]
Press Release 15 May 2014
Global Health Care Benefits Costs Stabilize, but Larger Hikes Loom, Towers Watson Survey Finds
Wellness, health promotion programs gaining interest
http://www.towerswatson.com/en/Press/2014/05/global-health-care-benefits-costs-stabilize-but-larger-hikes-loom-towers-watson-survey-finds
NEW YORK, May 15, 2014 — The cost of providing employee health care benefits has stabilized around the globe, although a new round of increases may be on the horizon for employers, according to a new survey by Towers Watson (NYSE, NASDAQ: TW), a global professional services company. The survey also found that health promotion and wellness programs are becoming more widespread in all regions as employers look to supplement traditional cost management tactics to contain rising costs.
The 2014 Towers Watson Global Medical Trends Survey, completed by 173 leading medical insurers in 58 countries, found that the cost of employee health care benefits is projected to increase 8.3% globally this year, slightly higher than the 7.9% and 7.7% increases experienced in the past two years. The smallest average increases are expected to continue throughout Europe, where economic and competitive pressures are keeping costs down, while average increases in the Asia Pacific, Middle East/Africa and Americas regions (not including the U.S.) are projected to remain above worldwide averages.
GLOBAL MEDICAL TRENDS: 2012 – 2014
| | 2012 | 2013 | 2014* |
| Global | 7.7% | 7.9% | 8.3% |
| Americas (ex-US) | 9.1% | 9.1% | 9.7% |
| Asia Pacific | 8.4% | 8.8% | 9.3% |
| Europe | 5.3% | 5.2% | 5.4% |
| Middle East/Africa | 8.8% | 9.8% | 10.0% |
*Projected
“While the cost of providing health care benefits to employees has stabilized over the past few years, controlling rising costs remains a significant concern for employers worldwide,” said Francis Coleman, director, International Consulting, at Towers Watson. “In fact, in all regions, health costs continue to rise at twice the rate of inflation. That’s a major concern for employers, with many insurers projecting costs to again escalate in the coming years.”
According to the survey, more than half (55%) of insurers in all regions anticipate higher or significantly higher medical trend over the next three years. Asia Pacific insurers are particularly pessimistic, with more than two-thirds (69%) saying they expect medical trend in the next three years to be higher or significantly higher than current rates.
This year’s survey examined factors driving medical costs in two ways: those cited to be employee or provider behavior as compared to external factors such as the high cost of new medical technologies and the profit motives of providers. In terms of employee/provider behavior, three-quarters of insurers (78%) are most concerned about providers driving up costs by overprescribing or recommending too many services. The second leading factor was the belief that many plan participants are seeking inappropriate care (45%). A significant change this year was the increased number of insurers (38%) that now cite insureds’ poor health habits as the third leading factor.
The survey also found much greater consistency among the medical conditions causing the highest prevalence of claims globally, with cardiovascular problems and cancer remaining the leading conditions. However, there was also an increase in claims due to respiratory, musculoskeletal and mental health issues. Historically, it has been difficult for employers to obtain comprehensive medical claim data, but insurers report offering more data in 2014 than in past years.
“While we are starting to see greater availability in claim reporting among insurers globally, concerns remain over coding and reporting consistency, since a surprising one-third of respondents are not using a recognized international coding standard such as ICD 9 or 10. This may result in challenges for multinationals as they seek to get a consistent view of the health conditions driving their utilization on a global basis. It also has an impact on assessing the priority of implementing health promotion and intervention programs globally,” said Coleman.
COST MANAGEMENT INITIATIVES
The use of contracted provider networks (63%) and preapproval for inpatient services (68%) remain among the top three medical cost management programs. However, a large number of insurers (71%) are also placing limits on certain services, thereby capping claims for some treatments in an effort to control costs.
The survey also found that respondents continue to report increased capability to offer health promotion features either directly or through a partner. The top three features offered by nearly two-thirds of insurers are second medical opinion, biometric screening, and lifestyle and health education.
“Interest in wellness and well-being strategies has been on the rise throughout the regions over the past few years. Insurers are recognizing that multinational employers are steadily seeing the value in promoting healthy lifestyles to their workers and families, and are taking steps to meet this increasing demand,” said Dr. Henriette Coetzer, global medical director, Towers Watson.
________________________________________________________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
