Dive Brief:
- A new Aon report predicts that global inflation rates will rise in 2018 and that costs for employer-sponsored health plans will follow the same upward path. The global professional service provider projects the medical cost increase to reach 8.4%, three times the expected rate of 3.1% for inflation.
- The report covers medical trends for employer-sponsored plans in 99 countries. Medical cost increases vary by region, with the highest rates projected for the Middle East/Africa and Latin America at 15.3% and 13.9%, respectively. Asia Pacific, Europe and North America are expected to see single-digit medical increases, with Europe having the the lowest rate of 5.8%.
- An aging global population, poor lifestyle choices and the increase in chronic disorders as well as lower productivity among employees may all be factors, according to the report.
Dive Insight:
Employers are responding to what they expect will be medical cost increases by focusing on healthcare outcomes, as opposed to the number of provider visits. They're focused on creating cultures of health and motivating employees to manage their health through preventive measures, such as wellness programs. Successful employers have sought ways to bring the benefits directly to employees to ease engagement, be it through onsite clinics or concierge services.
Wellness also is getting its due. Employers are expanding well-being initiatives to address workers' most common health and behavioral problems, such as managing back pain, high blood pressure, diabetes, stress, depression and financial distress.
Employers also are taking upfront steps to curb medical costs, including prescription drug costs — a major driver of increases — by negotiating plans with insurers for the best prices and value of services. Pharmacy benefit managers (PBMs) have been under scrutiny by employers who don't quite understand their business model or fees. In October, Anthem dropped Express Scripts Holding in favor of creating its own drug plan, accusing Express Scripts of overcharging it by billions of dollars. The recent CVS-Aetna deal could signal a sea change in how such benefits are approached.
