PHL employer healthcare costs seen rising 8.8% in 2021
THE cost of healthcare benefits borne by employers in the Philippines is expected to rise 8.8% in 2021 due to the pandemic, according to a survey of medical insurers conducted by Willis Towers Watson, an advisory, broking and solutions company.
The Philippine growth rate as estimated by medical insurers outpaces the Asia Pacific average of 8.5% in 2021. The regional average was 6.2% this year and 7.5% in 2019, according to the firm’s 2021 Global Medical Trends Survey, Willis Towers said in a statement.
“The pandemic undoubtedly had a major impact on slowing trend increases this year as it sparked a sharp decline in non-urgent surgeries and elective care,” said Susan La Chica, Head of Health and Benefits, Philippines at Willis Towers Watson.
Ms. La Chica said that while there was a drastic decline in the number of non-emergency patient visits in hospitals or clinics due to fear of exposure to coronavirus, there was a rise in the frequency of emergency room visits.
She added that actual cost of care per outpatient visit or confinement also rose due to the cost of personal protective equipment (PPE) for healthcare workers and the nature of conditions being managed.
“Continued delay in treatment in 2020 could mean an even larger increase in 2021 than projected,” she said.
Aside from the Philippines, China, India, Indonesia, Malaysia, New Zealand, Singapore, Thailand and Vietnam are also expected to see an increase of more than 8% in the cost of healthcare benefits in 2021.
It said that 49% of the insurers surveyed in the region expect that the medical benefit cost growth trend will remain constant over the next three years while 40% expect it to rise further.
According to the report, private medical care in the Philippines is largely dominated by health maintenance organizations (HMOs), which account for 80% of the plans.
Various physician organizations negotiated with HMOs and were granted a 50% increase in fees starting May to cover PPE costs, the report said, adding that the cost increase is expected to remain for the duration of the pandemic.
“Overall this helps explain why trend rates in the Philippines have edged up for 2020 to 8.5% from 7.8% in 2019 and are projected to continue increasing for 2021, although continued delay in treatment in 2020 could mean an even larger increase in 2021 than projected,” according to the report.
The study showed that cancer, cardiovascular diseases and conditions affecting the musculoskeletal and connective tissue are the top three conditions affecting medical costs in the region, it said.
Overuse of care by medical practitioners recommending too many services is the most significant cost-driving factor according to 75% of the respondents, it said, followed by overuse of care by insured members.
Willis Tower Watson also said that external factors affecting the increase of medical costs outside the control of employers and vendors were healthcare providers’ profit motive, the higher cost of medical technology, and the pandemic.
Ms. La Chica said personal healthcare awareness and hygiene improved because of the pandemic.
Use of telehealth, which could offset potential higher costs “and provide a more efficient way for those insureds to access and use healthcare in the future” also accelerated, she said. “However, that may also boost utilization due to ease of access and add to overall costs.”
The survey was conducted between July and September and took in responses from 287 leading medical insurers in 76 countries. — Vann Marlo M. Villegas