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Captive-Trends 2018

Captive Insurance Issues and Trends 2018

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Global Employee Benefit Health Plan Costs Increasing 3 Times Inflation

Healthcare Costs 480x377
July 06, 2018

Based on its latest global employee benefit research findings on medical trends around the world, Mercer Marsh Benefits (MMB) advises that adopting integrated health and well-being strategies underpinned by stronger digital and data capabilities will be critical in managing the rising costs of employee health benefit programs. The study shows that medical costs of private plans are increasing at almost three times the estimated inflation in most major economies, an average of 9.5 percent in 2017.

The survey, 2018 Medical Trends Around the World, indicates that employers have an opportunity to better manage healthcare costs and improve outcomes. Across 62 countries, MMB surveyed 225 insurers whose response data provided the following insights.

  • Only 14 percent of companies are offering substantial preventive lifestyle programs for staff.

  • While mental health is now cited as the third-highest risk factor influencing group medical costs, employers are not responding effectively, with close to 40 percent of insurers indicating that employer medical plans provide no access to personal counselling.

  • The survey found that 1 in 6 insurers are currently providing no digital claim capability today.

MMB advises that adopting a whole system approach to well-being, in which mental health is recognized alongside physical health, is one of the essential building blocks to help employees fulfill their potential. Furthermore, given the expectations of today's workforce for a seamless consumer-grade digital experience, employers and insurers will need to invest in digital and data capabilities.

Investing in data analytics and adopting a whole-system approach to well-being will help employers, employees, and insurers to manage cost and improve health outcomes, according to MMB.

John Deegan, senior partner at MMB, said, "As health care costs become more material (outside the US), employers are questioning the intent and design of programs. Given the digital health revolution underway, we are seeing progressive employers redefine health and benefit principles and question traditional medical insurance designs, many of which were based on receiving crisis treatment in a hospital setting. And while it originated in the US, the rapid evolution towards value-based care where providers are paid based on outcomes instead of fee-for-service, demands innovation from the insurance community."

"Health insurance is set for significant changes that will benefit clients," said Andrew Perry, managing director at MMB. "The Medical Trends Around the World research validates our thinking that there is a race within the insurer community to collect and use patient data more effectively. If progress is made in this area, it will help companies better address the needs of their employees and achieve the larger goal of a more affordable, quality-focused healthcare system for all."

A free copy of the report may be downloaded on the MMB website.
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