Towers Watson Global Medical Trend Survey

Towers Watson surveyed 173 private medical insurers in 58 countries other than the United States to determine medical trend and use of various techniques to control trend.  (TW Report)   Global average trend in 2013 was 7.9%, which is more than trend in the US and more than the twice the inflation rate.  A slight increase is projected by the insurers for 2014, to 8.3%.  The Americas, again not including the US, had a 9.1% trend, with Brazil showing very high trend and Mexico more moderate growth.  Canada had 11% trend, driven largely by drug pricing.  In Asia-Pacific, the average was 8.8%, with aging populations, rise in disease incidence and cost-shifting from public systems to private insurers some of the factors in the rise.  China and India are each seeing large trend increases.  Europe had the most moderate growth, at 5.2%.  Certain countries, such as Russia, have much higher growth rates, in Russia’s case driven by very high disease incidence.  The Middle East and Africa averaged 9.8%, with disease rates and increased treatment driving costs.  Categories of care causing the most growth vary by region.  In Asia-Pacific basic outpatient services and hospital inpatient were cited, while in Africa and the Middle East, drug costs were a particular concern.  By disease, cardiovascular, cancer, respiratory and musculoskeletal were major sources of claim and cost increases.  While many insurers do not cover mental health care, it also was ranked as a major cost concern.  Overall, the insurers are pessimistic about their ability to control trend growth over the next few years.  Provider and patient behaviors are blamed by most insurers, with providers overprescribing and recommending inappropriate services and patients failing to take care of their health and not using enough preventive care.  The high cost of new medical technology also was named as a problem.  Traditional cost containment techniques are still most prevalent, including cost-sharing with insureds, capping benefits for some treatments, preauthorization, use of contracted networks and disease management programs.  Health promotion is increasing among insurers, most commonly biometric screening and health education.  Many insurers have difficulty getting good claims and other data to perform analysis to support cost management, particularly due to poor coding systems or practices.  The report demonstrates that most regions of the world have health spending problems similar to those in the US and often have higher cost trends.