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WillisTowersWatson Report on Global Medical Trends

By December 6, 2019Commentary

Another view on medical trends for 2020, this time around the world, is provided by large benefit consultant and broker WillisTowersWatson.   (WTW Report)   The report is based on responses from 296 insurers in 79 countries.  The global medical trend is expected to be 6.8% in 2020, similar to the 6.7% trend projected for this year.  South and Latin America have the highest rate of growth at 12.2% and the MidEast and Africa are also up there with a 9.3% increase, while Europe is more sedate at 4.3%.  In the United States it was 7.2%, down modestly from the past two years.  China, with largest population, is experiencing quite high trend of 9.8%.  Of course, some of those South American countries, i.e., Venezuela, have substantial inflation issues and drive up overall regional trend.  No region is expecting lower trends over the next three years and over 40% of respondents said they expect higher trends in that period.  In no region is medical trend below general inflation and in most it is several percentage points above.  The most significant conditions driving spending around the world are cited as being cancer, cardiovascular conditions and musculoskeletal conditions, but respondents expect mental health and substance abuse to become a dominant factor over the next few years.  In all seriousness, with the level of geopolitical and personal stress around the world, I am sure there will be more mental health and substance abuse issues.  Insurers blame overuse of treatment by providers, cited by 73% of payers, and by patients, cited by 66%, for the increase in medical spending, along with new technology costs.  Another 41% point the finger at poor patient health habits and 28% say underuse of preventive care contributes.  The primary method they expect to use for cost control is coinsurance, which is a very blunt instrument for accomplishing that objective.  Dumping costs on patients or limiting benefit access for some services is far and away the most common spending management approach.  Apparently actually managing care and health is too much work.  Don’t expect any sympathy from me if you really don’t care about the health of the patients you are insuring.

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