2013/2014 Global Medical Trend Rate Survey Report

Transcription

1 Aon Hewitt Global Benefits 2013/2014 Global Medical Trend Rate Survey Report December 2013

2 2013/2014 Global Medical Trend Rate Survey Report Contents Introduction Key Highlights Call to Action Survey Results Average Medical Trend Rate Table Key Reported Causes of Adverse Medical Claim Experience Risk Factors Driving Supplementary Medical Plan Costs Global Wellness and Health Promotion Initiatives Appendix Trend Rate Overview

3 2 Aon Hewitt

4 Introduction Aon Hewitt is pleased to present the results of its survey of 2013 and 2014 medical trend rates around the world. The survey was conducted among Aon Hewitt offices that broker, administer or otherwise advise on medical plans that are established and managed by employers in each of the 69 countries covered in this report. The survey responses reflect the medical trend expectations from Aon professionals, clients and carriers represented in the portfolio of Aon medical plan business in each country. The trend rates presented herein do not include any allowances for potential employer countermeasures such as costcontainment plan amendments or the impact of any attendant carrier negotiations. Aon Hewitt has conducted this survey in order to assist multinational companies in: Budgeting premium costs for medical plan renewals for the two projection years Understanding the factors that are driving medical cost increases Devising wellness and cost-containment initiatives to respond to the challenges The trend rate figures shown is this report represent the percentage increase in medical plan (insured and self-insured) unit costs that are anticipated to be technically required in order to address projected price inflation, technology advances in the medical field, plan utilization and cost shifting from social programs. This survey covers three separate themes: Estimated medical trend rates for 2013 and 2014 Risk factors that are expected to drive medical cost inflation in the future Wellness and health promotion initiatives being undertaken by employers in order to deal with spiraling medical cost trends As a reference, we have also included the general inflation rates for 2013 and 2014 published by the International Monetary Fund which have been adopted as a proxy for domestic retail inflation levels in each country for the two projection years included in the survey. The trend rate figures and risk factors in this report relate to employersponsored plans and their participants. The information presented is not necessarily representative of each country s health care costs as a whole, nor of the health care situation of each country s population overall. 2013/2014 Global Medical Trend Rate Survey Report 3

5 Aon Hewitt intends to issue annual survey updates in the future. We expect that as the global demand for medical plan benefits extends to more countries, the number of participating countries published in our reports will rise. We hope you will find this report useful. We welcome any feedback you may wish to provide. 4 Aon Hewitt

6 Key Highlights The prevalence of employer sponsored medical plans is increasing in all countries covered by the survey. Furthermore, the scope of the supplementary plan coverage is expanding vertically (e.g., larger maximum lifetime benefits, larger allowances for maternity benefits) as well as horizontally (e.g., fewer exclusions, more procedures covered by the plan). The medical trend rates continue to exceed local general inflation levels. In 2013 the global average medical trend rate of 10.14% was 5.8 percentage points higher than the average inflation rate of 4.34% 1 For 2014, an even wider difference of 6.11 percentage points between the average medical trend rate of 10.34% and the average general inflation rate of 4.23% is expected 2 Aon Hewitt expects further medical cost escalation due to global population ageing, overall declining health, poor lifestyle habits pervading across emerging countries, continuing cost-shifting from Social programs and increasing utilization of employer sponsored plans Double digit margins between medical trend rates and domestic inflation levels were found in: Asia Pacific Europe Latin America Middle East/Africa Singapore Ireland Argentina Oman Vietnam Norway Venezuela UAE Ukraine Honduras 1 IMF World Economic Outlook Database April Ibid. 2013/2014 Global Medical Trend Rate Survey Report 5

7 The three main reported conditions that are giving rise to adverse claim experience around the world are: % Responding Cardiovascular 77 Cancer 55 Respiratory 44 Differentials by geographic region in the main medical conditions that were reported to generate adverse claim experience are: Africa Asia Pacific Canada Europe Latin America Middle East Cardiovascular Respiratory Cardiovascular Cancer Cancer Cardiovascular Infectious Disease Gastro-Intestinal Mental Health Mental Health Respiratory Respiratory Obstetrics Cancer Diabetes Diabetes Diabetes Diabetes Non-Communicable Diseases (NCDs) represent the main conditions behind the adverse experience which is driving high medical inflation. NCDs are directly linked to modern lifestyles, and incidence can be significantly improved through modification of individual behaviors. This represents both a challenge and an opportunity for employers to influence these behaviors. The key reported global risk factors that are expected to drive future claims are: % Responding High Blood Pressure 72 High Cholesterol 49 Stress 49 6 Aon Hewitt

8 Differentials by geographic region in the risk factors that are expected to generate future claims are: Africa Asia Pacific Canada Europe Latin America Middle East High Blood Pressure Infectious Diseases High Blood Glucose Stress Stress Stress High Blood Pressure High Blood Pressure High Cholesterol Sedentary Lifestyle Costly Novel Therapies Emerging (treat previously untreated conditions) High Blood Pressure Smoking Obesity High Blood Glucose High Blood Glucose High Blood Pressure Obesity The most common wellness and health promotion initiatives being undertaken by progressive employers globally are: % Responding Detection 85 Education 79 Advanced Assessment and Wellness Interventions 71 Call to Action The findings addressed in this report suggest that employers will need to accelerate their efforts at helping employees to understand their own health risk and to begin to take steps to improve health. Rising costs and increased prevalence of chronic conditions are a global phenomenon; regardless of the underlying medical insurance system, employers will experience added organizational cost and lost workforce productivity if these trends continue. 2013/2014 Global Medical Trend Rate Survey Report 7

9 Survey Results Average Medical Trend Rate Tables Annual General Inflation Rate (%) Annual Medical Trend Rates Annual General Inflation Rate (%) 4 Annual Medical Trend Rates Region Gross (%) Net (%) Gross (%) Net (%) Global North America Europe Asia Latin America & Caribbean Middle East & Africa Annual General Inflation Rate (%) Annual Medical Trend Rates Annual General Inflation Rate (%) 6 Annual Medical Trend Rates Region and Country Gross (%) Net (%) Gross (%) Net (%) North America (Avg) Canada United States Europe (Avg) Austria Belgium Bulgaria Denmark Finland France Germany Greece Hungary Ireland IMF World Economic Outlook Database April Ibid. 5 Ibid. 6 Ibid. 8 Aon Hewitt

10 Annual General Inflation Rate (%) Annual Medical Trend Rates Annual General Inflation Rate (%) 6 Annual Medical Trend Rates Region and Country Gross (%) Net (%) Gross (%) Net (%) Italy Norway Poland Portugal Romania Russia Spain Switzerland The Netherlands Ukraine United Kingdom Asia (Avg) Australia China Hong Kong India Indonesia Japan Kazakhstan Malaysia New Zealand Philippines Singapore South Korea Taiwan Thailand Vietnam Latin America & Caribbean (Avg) Argentina Bahamas Bolivia Brazil /2014 Global Medical Trend Rate Survey Report 9

11 Annual General Inflation Rate (%) Annual Medical Trend Rates Annual General Inflation Rate (%) 6 Annual Medical Trend Rates Region and Country Gross (%) Net (%) Gross (%) Net (%) Chile Colombia Costa Rica Dominican Republic Ecuador El Salvador Guatemala Honduras Jamaica Mexico Nicaragua Panama Puerto Rico Trinidad and Tobago Venezuela Middle East / Africa (Avg) Angola Egypt Kenya Malawi Nigeria Qatar Saudi Arabia South Africa Sultanate of Oman Turkey United Arab Emirates Zimbabwe Note: Net indicates net of domestic general inflation rates. The trend rate for the USA has been obtained from Aon Hewitt s annual Health Care Trend Surveys (January-June) for 2012 and 2013 as applicable for PPO plans (prior to any plan changes for costcontainment). 10 Aon Hewitt

12 Key Reported Causes of Adverse Medical Claim Experience The percentage figures below represent the percentages of responses from Aon offices that reported the indicated cause as a contributing factor in adverse claims experience in their respective countries. Top Global Main Causes Cardiovascular Cancer Respiratory Diabetes Gastrointestinal % Responding Aside from the cardiovascular cause (which was reported in 77% of the countries surveyed), the leading causes per region as reported by Aon offices were: Asia Pacific (% of Responses) Europe (% of Responses) Latin America (% of Responses) Middle East/Africa (% of Responses) 1 Respiratory 47 Cancer 60 Cancer 68 Respiratory 67 2 Gastrointestinal 47 Mental Health 45 Respiratory 58 Diabetes 56 3 Cancer 47 Diabetes 40 Diabetes 53 Cancer 33 4 Infectious Diseases 33 Gastrointestinal 35 Prescription Drugs 42 Gynecological 33 5 Gynecological 27 Gynecological 25 Gastrointestinal 42 Accident /2014 Global Medical Trend Rate Survey Report 11

13 Risk Factors Driving Supplementary Medical Plan Costs The figures below represent the percentages of responses from Aon offices that reported the indicated risk as becoming a leading factor in future adverse claims experience in their respective countries. Top Global Risk Factors High Blood Pressure High Cholesterol Stress Obesity High Blood Glucose % Responding Risk Factors % Responding Risk Factors % Responding 1 High Blood Pressure 72 9 Occupational Risks 15 2 High Cholesterol Genetics 11 3 Stress Air Pollution 10 4 Obesity Disease Transmitting Organism 7 5 High Blood Glucose Cancer 5 6 Physical Inactivity Kidney Dialysis 5 7 Smoking Unsafe Water, Sanitation, Hygiene 3 8 Bad Nutrition Aon Hewitt

14 The figures below represent the percentage of Aon offices reporting the indicated risk factors in their respective region. Asia Pacific (% Responding) Europe (% Responding) Latin America (% Responding) Middle East/Africa (% Responding) 1 Stress 62 Stress 74 High Blood Pressure 89 High Blood Pressure High Blood Pressure 54 High Blood Pressure 58 High Cholesterol 63 High Blood Glucose 33 3 High Cholesterol 54 Smoking 47 Obesity 47 Physical Inactivity 44 4 Obesity 46 High Cholesterol 42 High Blood Glucose 47 High Cholesterol 33 5 High Blood Glucose 31 Obesity 42 Stress 37 Cancer /2014 Global Medical Trend Rate Survey Report 13

15 Global Wellness and Health Promotion Initiatives The figures below represent the percentages of responses from Aon offices that reported the indicated wellness program as commonly provided among the indicated employer groups in their respective countries. Wellness Programs Reported as Commonly Provided (% Responding) Detection Education Programs Advanced Assessment programs Wellness Interventions Coaching Programs Commonly Provided across all Employers Provided by Progressive Employers Detection (% Responding) All Employers Progressive Employers Physical Check-ups Vision Screening Hearing Screening Mammograms Coaching (% Responding) All Employers Progressive Employers Incentive Programs 3 51 Health Specialists 3 35 Health Coaching Management Systems Aon Hewitt

16 Wellness Interventions (% Responding) All Employers Progressive Employers Quitting Smoking/Tobacco Use Physical Activity Employee Assistance Program Healthy Eating Health Weight Back Care Reducing Risk for Health Disease 9 38 Advanced Assessment (% Responding) All Employers Progressive Employers Heart Health Advanced Check-ups 9 37 Substance Use 9 26 Nutrition 7 44 Level of Fitness 0 37 Education (% Responding) All Employers Progressive Employers Communication Materials on Wellness Wellness Kits Informational Web Services Fitness Education /2014 Global Medical Trend Rate Survey Report 15

17 Wellness Interventions Coaching Education Advanced Assessment Detection Asia Pacific Physical Check-ups Vision Screening Hearing Screening Mammograms Heart Health Advanced Check-ups Substance Use Nutrition Level of Fitness Communication Materials on Wellness Wellness Kits Informational Web Services Fitness Education Incentive Programs Health Specialists Health Coaching Management Systems Physical Activity Quitting Smoking/Tobacco Use Healthy Eating Healthy Weight Employee Assistance Program Reducing Risk for Heart Disease Back Care All Employers Progressive Employers 16 Aon Hewitt

18 Wellness Interventions Coaching Education Advanced Assessment Detection Europe Physical Check-ups Vision Screening Hearing Screening Mammograms Heart Health Advanced Check-ups Substance Use Nutrition Level of Fitness Communication Materials on Wellness Wellness Kits Informational Web Services Fitness Education Incentive Programs Health Specialists Health Coaching Management Systems Physical Activity Quitting Smoking/Tobacco Use Healthy Eating Healthy Weight Employee Assistance Program Reducing Risk for Heart Disease Back Care All Employers Progressive Employers 2013/2014 Global Medical Trend Rate Survey Report 17

19 Wellness Interventions Coaching Education Advanced Assessment Detection Latin America Physical Check-ups Vision Screening Hearing Screening Mammograms Heart Health Advanced Check-ups Substance Use Nutrition Level of Fitness Communication Materials on Wellness Wellness Kits Informational Web Services Fitness Education Incentive Programs Health Specialists Health Coaching Management Systems Physical Activity Quitting Smoking/Tobacco Use Healthy Eating Healthy Weight Employee Assistance Program Reducing Risk for Heart Disease Back Care All Employers Progressive Employers 18 Aon Hewitt

20 Wellness Interventions Coaching Education Advanced Assessment Detection Middle East/Africa Physical Check-ups Vision Screening Hearing Screening Mammograms Heart Health Advanced Check-ups Substance Use Nutrition Level of Fitness Communication Materials on Wellness Wellness Kits Informational Web Services Fitness Education Incentive Programs Health Specialists Health Coaching Management Systems Physical Activity Quitting Smoking/Tobacco Use Healthy Eating Healthy Weight Employee Assistance Program Reducing Risk for Heart Disease Back Care All Employers Progressive Employers 2013/2014 Global Medical Trend Rate Survey Report 19

21 Appendix Trend Rate Overview The trend rates shown in this report represent national averages and are the predicted increase in claims cost. Trend increases for a specific company may vary significantly from these trend rates due to regional cost variations, company plan design, company demographics and other factors. In addition, insured rate increases may be higher or lower than these trend rates based on an insurance company s profitability, the plan s claims loss ratio, the plan design, insured demographics and other factors. It is important to note that these trend rates might not be appropriate for other purposes. Medical trend rate is defined as percentage of change in the cost of health care prior to any cost-containment measure undertaken by plan sponsors. The components of health care trend that we have considered include: Price inflation This is the projected annual change in the domestic retail consumer price index health care element of each country. In absence of information on projected inflation for the medical plan component in any given country, we have used the change in the overall consumer price index Leveraging impact on fixed amount elements of plan design This is the additional cost added to a health plan due to the leveraging effect of increasing expected claims on unchanging deductibles, copays, or out-of-pocket maximums Utilization This component reflects an increase in the demand for medical care services in response to factors such as increased access to medical services, plan design, participant age, and new medical technology and services Technology advances This reflects the change in cost due to new procedures, information, experience, and equipment replacing older techniques Cost shifting This reflects a provider of medical services such as government social health care programs transferring their cost to private sector supplementary plans 20 Aon Hewitt

22 Contact Information Francois Choquette Francois.Choquette@aonhewitt.com Wil Gaitan Wil.Gaitan@aonhewitt.com Tammy Mattson Tammy.Mattson@aonhewitt.com Doug Gibbons Doug.Gibbons@aonhewitt.com Janine Heijckers Janine.Heijckers@aonhewitt.com About Aon Hewitt Aon Hewitt empowers organizations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organizational and personal performance and growth, navigate retirement risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability and wellness. Aon Hewitt is the global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide. For more information on Aon Hewitt, please visit Copyright 2013 Aon plc