Willis Towers Watson Global Medical Trends Report

The United States isn’t the only nation grappling with rising health costs.  Willis Tower Watson issues their 2016 Global Medical Trends Report, showing rapidly rising health care spending around the world.   (WTW Report)   The headline number is that the 174 health insurers surveyed, doing business in 55 countries, expect medical trend to be 9.1% in 2016, compared to 8% in 2015 and 7.5% in 2014.  U.S. trend was actually somewhat low for 2015, reported in this survey at 5.2%.  For the Americas as a whole, the trend was 13.3%, driven by some inflationary problems in Venezuela and other South American and Latin American countries.  For Asia, trend in 2015 was 6.4% and for Europe it was 5.2%.  Note that in no region is insurer health spending growing at a rate below economic growth and in most places, it is rising much faster.  Somewhat ominously, more than half the insurers expect medical trend over the next three years to be somewhat or significantly higher than it is now.

Inpatient hospital care is the largest driver identified as a source of higher medical trend, but other categories are not far behind.  New medical treatments and technologies, provider income demands and overutilization of unnecessary services were also listed as trend drivers.  Although insurers and employers tend to blame both providers and patients for driving excess use, in all countries consumers say they are responding to the resulting higher costs by avoiding care they believe they may have needed, including skipping medications and not getting recommended tests or services.  While many consumers around the glove say they would use technology like mobile apps to help ensure appropriate use of health services and to manage their health, few report having access to such technology.  The top disease categories pushing trend up were cardiovascular and cancer, but there is variance by region.  In countries where it is permitted, employers and insurers have responded to the higher trend primarily by shifting more cost to employees and patients via deductibles and coinsurance.  Other cost control strategies include limits on some services, requiring prior authorization, using contracted networks of providers and, to a lesser extent, wellness and disease management programs.  If misery loves company, the U.S. has abundant companions on the road to higher health spending.