The cost of providing medical care to staff continues to vastly outpace inflation in 29 major economies, according to new research by Mercer Marsh Benefits. The report—Medical Trends Around the World—is based on a survey of insurers and showed that the average per person increase in healthcare costs was more than double the rate of inflation in 2014. Last year saw an average of 10% increase in medical costs, with 2015 medical inflation anticipated to be around 10.5%. For Hong Kong, these numbers are slightly lower—at 7.9% and 8.5% respectively.
The report solicited claims and cost data from insurers in each market and has been produced to highlight the main causes of, and responses to, medical inflation. Amy Laverock, Partner, Mercer Marsh Benefits and author of the report commented, “Our report is designed to provide a cross-border overview for multinationals and it’s clear that company spend on healthcare continues to soar. The causes vary by region, but cancer and cardiovascular disease remain high cost items.
“Many of these claims are lifestyle related and caused, for example, by smoking, poor diet or a lack of exercise. Through access to personalized multi-disciplinary health advice, monitoring and even pharmaceutical care, companies can address these lifestyle choices, improve the health of their workers, improve their productivity, reduce absences and crucially manage corporate medical costs.”
The report found that access to healthcare for the most common physical healthcare needs is largely in place. However, it found that other areas—such as counseling and treatment for mental health conditions —are less consistently addressed. Employers were expanding coverage in areas of women’s health, but there was limited access being extended to LGBT concerns, for example. Broadly, the consultancy anticipates that as demographics and workforce patterns change and new regulations emerge, governments will continue to place greater emphasis on employers for coverage that responds to the modern-day needs, including preventative care.
The table below breaks down findings from individual countries mentioned in the report.
Medical Inflation rates around the world
This graph highlights both the medical trend rate experience (defined as the average cost per person of healthcare costs) in 2014 and 2015 as well as estimated inflation.
| 2014 Medical Trend Rate Experience | 2014 Estimated Inflation* | 2015 Projected Medical Trend Rate | 2015 Forecasted Inflation* | |
| Global* | 10.0% | 3.5% | 10.5% | 3.8% |
| North America | - | - | - | - |
| Canada | 8.0% | 1.9% | 11.0% | 0.9% |
| Asia (average) | 10.7% | 3.2% | 11.6% | 2.5% |
| China | 9.6% | 2.0% | 9.3% | 1.2% |
| Hong Kong | 7.9% | 4.4% | 8.5% | 3.2% |
| India | 8.2% | 6.0% | 8.8% | 6.1% |
| Indonesia | 12.0% | 6.4% | 12.0% | 6.8% |
| Malaysia | 13.2% | 3.1% | 16.1% | 2.7% |
| Philippines | 5.5% | 4.2% | 6.8% | 2.1% |
| Singapore | 8.4% | 1.0% | 10.2% | 0.0% |
| South Korea | 5.2% | 1.3% | 7.0% | 1.6% |
| Taiwan | 7.4% | 1.2% | 7.4% | 0.7% |
| Thailand | 17.7% | 1.9% | 17.8% | 0.3% |
| Vietnam | 22.8% | 4.1% | 23.4% | 2.5% |
| Europe (average) | 7.5% | 1.8 | 7.7% | 2.4% |
| France | 7.7% | 0.6% | 6.0% | 0.1% |
| Greece | 6.4% | -1.4% | 3.7% | -0.3% |
| Ireland | 11.8% | 0.3% | 13.6% | 0.2% |
| Italy | 2.3% | 0.2% | 2.0% | 0.0% |
| Poland | 10.0% | 0.0% | 7.5% | -0.8% |
| Portugal | 0.8% | -0.2% | 1.3% | 0.6% |
| Russia | 12.0% | 7.8% | 16.9% | 17.9% |
| Spain | 5.2% | -0.2% | 5.9% | -0.7% |
| Turkey | 14.2% | 8.9% | 15.7% | 6.6% |
| United Kingdom | 4.2% | 1.5% | 4.5% | 0.1% |
| Latin America (average) | 13.0% | 6.8% | 12.7% | 8.5% |
| Argentina | 32.1% | 23.9%* | 29.7% | 38.5%* |
| Brazil | 16.0% | 6.3% | 17.0% | 7.8% |
| Chile | 8.5% | 4.4% | 7.9% | 3.0% |
| Colombia | 7.0% | 2.9% | 6.2% | 3.4% |
| Mexico | 9.2% | 4.0% | 10.5% | 3.2% |
| Panama | 12.2% | 2.6% | 11.1% | 0.9% |
| Peru | 5.9% | 3.2% | 6.2% | 2.5% |
*Notes:
- Sources for inflation rates include the International Monetary Fund (World Economic Outlook Database, April 2015 and October 2014), Latin America Economic Trends, April 2015 update and Global Employment Trends 2014. For Argentina, the 2014 inflation is sourced by INDEC Argentina; the 2015 inflation rate is the result of aggregated data from private sources. The above medical trend rates reflect insurer survey results and may not be Mercer Marsh Benefits’ view.
- Global average was taken from 29 participating countries with acceptable number of responses.US data can be found in this the Mercer National Survey of Employer Sponsored Medical Plans. The research parameters for the two reports are different so consequently, US data has been excluded from this release.
Paul Arkwright
Publisher
