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Rising medical costs fuelling ‘smarter’ healthcare decisions

Insurers are offering education and incentives to drive positive behaviour

Increasing medical costs are encouraging health insurers to help their members make smarter healthcare choices, research suggests.

According to the Mercer Marsh Benefits “Medical Trends Around the World” report, medical costs continue to outpace general inflation by close to three times, with the global average standing at 9.7% in 2018.

A similar increase is expected for 2019 and even higher for 2020. 

The survey of 204 insurers across 59 countries found that the top three health risk factors influencing medical cost remain metabolic and cardiovascular risk, dietary risk and emotional/mental risk.

In response, the number of insurers investing in initiatives to enable quality-focused care, to better guide members to the right care options for them more quickly, has more than doubled. Globally, 29% now name this type of investment as a top strategic priority.

Insurers are responding by helping members make smarter healthcare choices with 63% of insurers providing education, tools and incentives to drive positive behaviour.

Another 78% are now considering or already support virtual health consultations.

Hervé Balzano, Mercer Marsh Benefits’ international leader, said that as the cost of providing medical benefits continues to rise, employers should assess how to make the most of plan design, including giving access to quality-based care to drive better outcomes.

Nick McClelland, UK commercial leader at Mercer Marsh Benefits, added that growing recognition of mental health disorders in the UK has led to diagnoses surpassing the limitations of NHS provisions, meaning employers now face unprecedented decisions about their role in relation to employees’ mental wellbeing. 

“The impact of poor lifestyles in the UK is also increasing, with obesity driving a rise in the incidences and severity of diabetes and cardiovascular disease,” he warned.

McClelland said preventative wellness is gaining significant attention for organisations in the UK, but they are struggling to establish measurable programmes. 

“By focusing on embedding wellness in the organisational culture, companies will have a much better chance of achieving this,” he advised.