Cost of health care seen rising at slower pace
Health plan usage plunged across the globe this 2020 as most people avoided hospitals, forfeited routine check-ups and delayed elective procedures in fear of the coronavirus (COVID-19) pandemic, likely resulting in a slower increase in the cost of medical benefits next year.
This was according to a research by London-based global professional services firm Aon plc, citing 2020 as an unprecedented year marked by widespread decrease in employer-sponsored medical plan utilization due to the pandemic and subsequent global lockdown measures.
In the Philippines, Aon projected in its 2021 Global Medical Global Trend Rates report that health care benefit cost would likely rise at a slower pace of 8 percent next year from an estimated 9.2 percent growth this year.
This is in line with trends across Asia-Pacific, where growth in medical trend costs are seen to ease to 8 percent in 2021 from an estimated 8.7 percent increase this year. Hong Kong is projected to see the lowest medical cost inflation at 5.3 percent in 2021, likewise due to a decline in elective surgeries and outpatient routines.
Globally, average medical trend growth rate is projected to soften to 7.2 percent next year from 8 percent this year —the lowest medical inflation seen since Aon started its annual survey in 2013.
However, Aon expects medical plan usage to gradually return to prepandemic levels in 2021.
Netting out the impact of general inflation rate, net medical cost in the Philippines is seen to ease to 5.1 percent next year from 5.9 percent this year.
Despite some softening of health care inflation next year, the study said medical costs would still rise significantly above general inflation.
In fact, Aon expects continued medial plan cost escalation moving forward due to population ageing, overall declining health, poor lifestyle habits and increased prevalence of chronic conditions as these continued to be global phenomena further exacerbated by the potential long-term health impact of the deferred treatments and routine checks that resulted from the pandemic.
Employers will continue to face the prospect of added organizational costs and employee productivity losses, unless the controllable factors contributing to these patterns are effectiveness addressed, the research said.
Tim Dwyer, CEO of Health Solutions, Asia-Pacific at Aon, said: “COVID-19 has underscored the need for better design and management of employee health and benefit programs. To mitigate medical costs by reducing chronic conditions, employers in Asia-Pacific must invest in well-being programs to promote mental health, physical activity, healthy eating and preventive strategies like physical check-ups and screenings.”
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