Medical costs: still a cause of concern
Daniela Masters of GEB comments on trends observed for captives with group medical risk.
Can you comment on key trends you’ve observed across the GEB medical portfolio?
As we look across our global medical claims data we see some key trends emerging relative to medical spending, the major diagnoses driving this spending, and utilisation trends between the public and private sectors.
In terms of medical claims spending, most markets have now reached and exceeded pre-COVID-19 pandemic levels (global average increase in paid claims of +15 percent since 2019). Some of this growth is due to an expansion in coverage terms and conditions, dependant eligibility, unit cost and frequency (claims per claimant), as well as an increase in utilisation of private versus public sector healthcare.
The public to private shift in particular is creating challenges for private insurance plans that may now need to consider the addition of ‘gate-keeping’ measures such as increased out-of-pocket requirements as a means of containing costs. This is also happening at a time when captives are considering expanding coverage to help attract and retain talent, including the addition of diversity, equity and inclusion (DEI) benefits such as in vitro fertilisation, and other enhanced fertility benefits; coverage for same sex partners; gender-affirming care; and the addition of programmes that support psychological safety and mental health. Cost containment in this environment is both challenging and essential.
In terms of inflation, general inflation is beginning to decline with forecasts projecting many markets achieving an under 3 percent general inflation rate by 2026. However, medical trend continues to outpace general inflation and this is expected to continue for the foreseeable future. The ongoing, ever-increasing cost of healthcare is driven by provider practice patterns, an aging population, patient demand and increased utilisation, the high cost of new treatment technologies, and the increased use of private vs public sector care.
In terms of the major diagnoses driving care costs, GEB’s data indicates that digestive disorders, musculoskeletal disorders, cancers, respiratory illnesses and genitourinary disorders are consistently among the top five disease cost drivers for paid claims across all markets. This is also true on a regional basis in Asia, the Middle East, Latin America and Europe, with the addition of the health status/services category indicated as another top diagnostic cost driver in Latin America and Europe.
It is important to remember that our data reflects what is covered by private medical insurance in the respective country. This may differ from public health diagnoses trends on a global or regional basis.
GEB’s ability to aggregate and analyse data on claims, general and medical inflationary trends and diagnostic cost drivers helps us to better support our clients as they continually shape and adjust their global benefits strategy in response to changing health needs and market dynamics.
“We will continue to help clients develop locally appropriate, competitive benefit programmes that support talent acquisition and retention.”
How does GEB support health captives?
At GEB we focus on applying data and local market insight to help guide client decision-making. Our ability to aggregate and analyse global claims data, as well as market-specific data, sets us apart from other networks, we believe.
We begin with the aggregation and organisation of claims data—this is essential to anticipating future trends and costs, and to developing an overall global health benefits strategy. GEB’s medical claims data is aggregated, analysed and organised through a sophisticated dashboard interface that allows clients to view country-specific detail on claims and utilisation experience to reveal data insights in a highly interactive format. Reports allow clients to view detail on paid claims, group membership information, per claim and claimant key performance indicators, large claims and high claimant data, benefit and diagnostic categories (ICD-10 chapters and subchapters), year-over-year changes and indications of root causes for claims spending (eg, incidence and frequency of services and unit cost), and benchmark data.
Our dashboard reports provide captives with deeper insight into claims performance and trends, which can help them identify key areas of medical risk for their group, as well as current and emerging disease states. This helps to establish a clearer pricing structure for better risk management, and can guide the design of the benefits programme itself. These data-driven insights can also help guide the design of corporate health and wellbeing programmes. We work with clients to help them identify relevant, appropriate and cost-effective health benefit programmes for their insured members.
In addition, we leverage the expertise of our local network partners to provide real-time local market feedback on pricing, cost trends, diagnostic trends, the regulatory environment, and local benefits standards and norms. Our dedicated health team combines these datasets—technical claims data and local market intelligence—to analyse group claims experience, develop ad hoc/tailored reports, review local plan designs to identify gaps in coverage, and provide customised health education and awareness campaigns designed to target specific disease states.
What’s on the horizon for health captive support from GEB?
GEB will continue to offer the expertise of our dedicated Health & Wellbeing team to provide insight on global medical programme design, as well as trends and cost drivers. This supportive partnership between the GEB Health & Wellbeing team and health captives is one we are committed to and will continue to expand upon.
Relative to health plan design, we will continue to help clients develop locally appropriate, competitive benefit programmes that support talent acquisition and retention. We recognise that employee needs and expectations of their health plans are changing (eg, DEI benefits), and captives must balance these needs with overall risk management.
By working closely with health captives, we can better understand their global benefits strategy and identify locally appropriate and compliant solutions to help them meet their strategic goals. This ongoing collaboration with captives and our local insurance partners can help to create a benefits programme that is better suited to the needs of today’s employees, introduce key organisational change from a cultural perspective, and support the overall financial health of the captive.
Daniela Masters is director, Global Health & Wellness at GEB. She can be contacted at: masters@geb.com
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