Dive Brief:
- Employee healthcare benefits costs are going up, thanks primarily to the higher cost of hospital/inpatient services, medical technology and the overuse of services, according to a new survey of medical insurers.
- Willis Towers Watson's 2016 Global Medical Trends Survey found that medical insurers project the healthcare benefits costs to rise by 9.1% this year, an increase from 8.0% in 2015 and 7.5% in 2014.
- Insurers in the Americas (not including the U.S.) and Middle East/Africa regions are projecting double-digit average increases for the third straight year. The European region continues to show the lowest level of increase and other Willis Towers Watson research shows U.S. employers are experiencing healthcare benefit cost increases averaging several percentage points lower than those in other countries.
Dive Insight
Hospital and inpatient services are the highest expenses driving the increases, although all other services are close behind. The most significant cost-driving factors outside the control of employers and vendors, 58% cited the high cost of medical technology followed by providers’ profit motives, at 44%. Interestingly, 75% ranked overuse driven by medical practitioners recommending too many services as the leading factor driving costs.
Francis Coleman, senior leader of Health and Benefits, Global Services and Solutions, Willis Towers Watson, said that even though employers and vendors can’t control medical technology costs, they can mitigate the cost and overuse of services by making employees better health care consumers.
"Encouraging prevention and implementing wellness programs are just two examples of how to accomplish this. Employers can also implement provider and vendor management programs to better control overuse of services,” Coleman said.