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Survey forecasts 13.1% medical inflation in the Philippines in 2018
MANILA, Philippines — Based on the cost of private healthcare plans, the Philippines medical inflation rate is projected to reach 13.1 percent this year, according to Mercer Marsh Benefits’ 2018 Medical Trends Around the World.
This is expected to be the highest medical inflation rate in Asia, despite the fact that the Philippines’ population—median age of 23 years—is one of the youngest in the region. This is also seen to outpace the full-year inflation forecast by the Bangko Sentral ng Pilipinas for 2018.
In 2017, the Philippines’ healthcare costs rose by 12.4 percent from 2016, outpacing the country’s 3.2 percent full-year inflation. The continued trend of the Philippines’ medical inflation rate may outpace the local inflation rate.
Mercer Marsh Benefits surveyed 225 insurers across 62 countries for the study. It found that the global medical cost in 2017 increased at 9.5 percent, almost three times the inflation rate of 3.4 percent. It also pegged medical inflation for 2018 at 9.1 percent.
This is expected to bring financial strain to companies who pay for employee health insurance premiums, especially those with large workforces.
Mercer Marsh Benefits recommends that employers review their organizations’ healthcare plans, invest in data analytics, and adopt a proactive and holistic approach in order to effectively manage employee healthcare costs. Mercer Marsh Benefits is Marsh & McLennan Companies’ international employee benefits business.
An economic burden
Insurers attribute the rise in costs to the increasing incidence of non-communicable disease such as heart disease, cancer, stroke, chronic respiratory disease, diabetes, and kidney disease.
“Aside from the obvious threat to the life-span and quality of life of its population, the increase in chronic non-communicable diseases in the Philippines can become a big economic hurdle,” said Teng Alday, CEO, Mercer Philippines Inc. and Health Business leader, Marsh Philippines Inc.
“The country’s upwardly-mobile young population has been one of our country’s key economic drivers. However, if more of them are getting sick, their long-term treatments will be a financial burden both the private and public sectors will have to bear,” the CEO said.
Another trend seen to drive medical inflation rates is increased workplace and/or personal-related stress/pressure.
“Studies have shown how these impact not just physical health, but mental health as well. However, it can be challenging to fully grasp how prevalent mental health issues are in the country as many who suffer are unable to speak up due to the stigma and misunderstanding they anticipate they will face,” Alday said.
Employers are encouraged to have a proactive and holistic approach to wellbeing, in which mental health is recognized alongside physical health, as one of the essential building blocks to help employees fulfill their potential.
“Traditional medical insurance designs are mainly based on receiving crisis treatment in a clinic or hospital setting while seldom involve the principal of encouraging a healthy lifestyle. Adding the preventive elements into the design will help lower the employee health care cost,” Alday advised.
Stronger data, digital capabilities
Other factors seen driving medical inflation rates are supplier increases (such as availability and access to new medical technologies), changes to health provider fee guides/schedules, rising employee expectations, changes to public/government social security schemes and/or health reform/legislation.
“Given how dynamic these factors are, employers need to be smarter about their organizations’ healthcare plans, using data and harnessing digital advancements to fine-tune their approach,” Alday said.
Download a copy the report here.
Source: https://www.philstar.com/business/2018/10/23/1862499/survey-forecasts-131-medical-inflation-philippines-2018#bysy1u2146lbhOgd.99