Global Medical Trends

By May 26, 2017Commentary

It is not only the United States that is grappling with growing health spending but most other countries as well, according to a new Willis Towers Watson survey.   (WTW Survey)   The survey is focused on the medical trend for employer-provided insurance, but includes more general spending.  For 2017, average per capita, GDP-weighted global medical trend is expected to be 7.8%, compared to 7.3% in 2016.  The United States anticipates 7.5%, while its supposedly more medically efficient northern neighbor is looking at a higher trend of 9.4%.  Latin America has the highest trend at 11.5%, but this is due to some extent to high rates of inflation in a number of the countries.  Europe is lowest at 4.5%, probably due both to low inflation and to national health systems which deny coverage for many expensive services.  The Mideast/Africa expects a 9.8% trend, and Asia rounds things out at 8.6%.  The world’s two most populous countries, China and India, are looking at 10.3% and 20% trends, respectively, but in India’s case about half is due to inflation.  Half of world’s large health insurers expect even higher trends over the next three years.

The primary explanations given for the higher trend are hospital inpatient costs, providers ordering, and patients seeking, too many unnecessary services, increased drug prices and new medical technology.  The primary diseases which insurers see driving trend are cancer and cardiovascular conditions, in all parts of the world.  The main tactics used to control trend are familiar to those in the US, in fact, most originated here.  They include greater patient cost-sharing, utilization management, provider networks and wellness efforts.  Insurers in the US feel they are in the best shape regarding coding and data analytics which provide useful information for trend management.  Europe lags in this area.  The report is useful, gives a broader picture than the one we usually see dealing solely with American issues and supports the view that in many ways, other than unit prices, the US is in better shape than most countries in dealing with health costs.

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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