Orient - The Official Magazine of the British Chamber of Commerce Singapore - Issue 67 July 2018 - Page 44 Asia’s Medical Inflation – Cause for Concern The obvious impact of medical inflation is that it flows through to the financing cost of medical plans in the form of higher premiums. Consequently, organisations may seek to limit their exposure to increased funding costs through restricting the scope of medical benefits provided to their employees. This has genuine capacity to increase out-of-pocket costs to employees and their dependents. OECD data from 2014 shows that this is a real concern with several markets recording high numbers including China (32 percent), the Philippines (53.7 percent) and Singapore (54.8 percent).
So, what are insurers and employers doing to manage the impact of medical inflation?
There are nascent signs that medical insurers are making some inroads into managing the cost of the chronic illnesses which dominate their claims registers. However, whilst most insurers state that they provide claims reporting to clients this either lacks the necessary granularity to be effective in developing risk and cost management strategies or clients are failing to use the data to positive effect. Similarly, only a minority of insurers are tracking inpatient readmission rates on chronic illness or working with healthcare providers on chronic disease management programmes.
Regarding organisations implementing wellness programmes to encourage employees to adopt healthy lifestyles that would reduce the demand for medical services, insurers observed that a largely superficial approach is being taken. The two most popular initiatives are health screening and health promotion. The former is often driven by either external or internal compliance requirements whilst the latter too often fails to match up with prevailing health trends or risk factors to be regarded as successful. With the incontrovertible evidence that modifiable lifestyle behaviours are driving the NCD epidemic, a rethink on this subject is clearly required.
Outlook
Looking to the future, the report identifies the critical role that technology will increasingly play. Already, healthcare has been a major beneficiary of technological innovation in the development of diagnostic equipment, pharmaceuticals and in the operating theatre. As the primary focus of public and private healthcare systems transitions from reactive to preventive care, the revolution that is already under way in wearables technology, telehealth, eHealth apps, hospital information systems and wellness portals is set to experience explosive growth. Stakeholders across the health spectrum including providers, funders and consumers are on the cusp of witnessing a major change in healthcare delivery. About the Author Tim was appointed CEO Asia Pacific of Health & Benefits in 2011, having previously been Executive Director of Aon Hewitt Asia Pacific. With considerable experience in domestic and international compensation, employee benefits and employee risk management, Tim has led many of Aon’s initiatives for domestic and multinational clients in Asia Pacific. Tim is a member of the Aon Asia Pacific Talent, Rewards and Performance Leadership Team and Aon Risk Solutions Asia Leadership Team. Tim also chairs Aon’s Health & Benefits Practice Council in Asia Pacific, and is a member of Aon’s Global Health Practice Council. Clients for whom Tim has acted include AMP, Boeing, Cadbury Schweppes, Kraft Foods, Macquarie Bank, McDonalds, Microsoft, Morgan Stanley and Motorola.
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