Global healthcare benefit cost increases projected to largely continue into 2024, WTW survey finds
WTW (NASDAQ: WTW) Survey: 3 in 5 Insurers Expecting Higher Medical Care Benefit Cost Increases in 2024
Positive
Global medical care benefit cost increases remain high at 9.9% in 2024 after hitting a record high of 10.7% in 2023
Employers are facing both higher cost increases as well as the potential for significant volatility, making it even more difficult to budget and plan
The survey found that the leading driver of medical costs continues to be overuse of care due to medical professionals recommending too many services or overprescribing
Negative
Global medical care benefit cost increases remain high at 9.9% in 2024 after hitting a record high of 10.7% in 2023
The underuse or lack of preventive services is also a significant cost driver
11/29/2023 - 09:06 AM
High costs are likely to remain with nearly 3 in 5 insurers expecting larger increases over the next 3 years
ARLINGTON, Va., Nov. 29, 2023 (GLOBE NEWSWIRE) -- Global medical care benefit cost increases, as reported by health insurers, show little to no decline in 2024, one year after hitting a historic double-digit inflation, according to a survey by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company. Adding further emphasis to the continued risk of high medical costs, nearly three-fifths of insurers (58% ) anticipate higher or significantly higher increases over the subsequent three years.
The WTW Global Medical Trends Survey found the cost of medical care globally jumped from 7.4% in 2022 to a record high of 10.7% in 2023. The insurer-reported cost trend for 2024 is projected to be an average of 9.9% . This is influenced by variations in regions around the world, with some showing little to no change from 2023 to 2024, and others registering slight decreases or increases. The sharpest drop in the rate increase is projected in Europe — from 10.9% in 2023 to 9.3% in 2024 — the lowest increase projected in any region. The one region with an expected increase in medical trend is the Middle East/Africa, where increases are projected to rise from 11.3% in 2023 to 12.1% in 2024.
Several factors are contributing to the variations noted above. The spread of COVID-19 in waves during the pandemic produced wide swings in the utilization of acute medical and outpatient care that have largely leveled out or waned. The spike in elective procedures, consultations and other medical care resulting from delayed or postponed care due to the pandemic has eased; however, the severity of some missed diagnoses and care needed now has worsened. In addition, global inflation, which was a significant factor in driving up healthcare costs, has moderated in 2023 and is expected to continue to fall going into 2024.
“While some cost increases are projected to ease in 2024, they remain at significantly high levels,” said Linda Pham, senior director, Integrated & Global Solutions, WTW. “The high cost of new medical technologies is a key reason for the persistently high trend. Furthermore, in some regions, ongoing geopolitical conflicts and resulting displaced populations have negatively affected medical costs due to an increased need for care and reduced availability of providers.”
Global medical trends: Healthcare benefit cost increases, 2022 – 2024
2022 2023 2024 projected Global + 7.4% 10.7% 9.9% North America 8.0% 9.8% 9.4% Latin America 10.5% 12.4% 11.6% Asia Pacific 7.2% 9.9% 9.9% Europe 6.7% 10.9% 9.3% Middle East/Africa 9.8% 11.3% 12.1%
*Global and Latin America numbers exclude Argentina and Venezuela
The leading driver of medical costs, according to insurers, continues to be overuse of care (59% ) due to medical professionals recommending too many services or overprescribing. Nearly half of insurers (49% ) also indicate that insured members’ poor health habits are among the top factors. The underuse or lack of preventive services (47% ) is also a significant cost driver.
The addition of wellbeing services (54% ) was the biggest change insurers made to their medical portfolio in 2023. The survey also found telehealth offerings continue to be a priority for insurers. Four in 10 respondents (41% ) added telehealth services in 2023, making this the second most prevalent change insurers made to their offerings.
“Employers are facing both higher cost increases as well as the potential for significant volatility, making it even more difficult to budget and plan. Faced with this environment, inaction is not an option. Employers must understand their risk tolerance, review their current offerings to ensure optimal value and explore strategies to balance cost pressures with the need to support the employee experience. By understanding the factors that affect healthcare and drive costs in their populations, employers can effectively combat the ever-present threat of rising costs,” said Debby Moorman, head of Health & Benefits, North America, WTW.
About the survey
WTW conducted its 2024 Global Medical Trends Survey between June and August 2023. A total of 266 leading insurers representing 66 countries participated in the survey.
About WTW
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.
Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you. Learn more at wtwco.com.
Media contacts
Ed Emerman: +1 609 240 2766eemerman@eaglepr.com
Ileana Feoli: +1 212 309 5504ileana.feoli@wtwco.com
What are the projected medical care benefit cost increases for 2024 according to WTW's survey?
According to WTW's survey, the projected medical care benefit cost increase for 2024 is 9.9%.
What are the leading drivers of medical costs according to the survey by WTW?
The leading drivers of medical costs according to the survey are overuse of care due to medical professionals recommending too many services or overprescribing, insured members' poor health habits, and underuse or lack of preventive services.
What are the changes that insurers made to their medical portfolio in 2023 according to the survey?
According to the survey, the biggest change insurers made to their medical portfolio in 2023 was the addition of wellbeing services, followed by the addition of telehealth services.
What is the ticker symbol for WTW?
The ticker symbol for WTW is NASDAQ: WTW.
How much did the global medical care benefit cost increase from 2022 to 2023?
The global medical care benefit cost increased from 7.4% in 2022 to a record high of 10.7% in 2023 according to WTW's survey.
