Just in case you’re feeling lonely about the state of health care costs in the U.S., note that we’re in good company: medical costs will accelerate around the world over the next five years.
Watson Wyatt brings you this news based on the results of a poll conducted among 85 insurers that cover medical for global employers in the Americas, Africa, Asia and Europe. The benefits consulting group found that health cost increases are growing faster than rates of inflation in 80% of countries surveyed. Thus, hyperinflation of health costs isn’t just an American malaise, but a problem for most economically developed countries.
Watson Wyatt discovered that the factors that drive health spending up in the U.S. are the same things that increase spending elsewhere: medical technology, increased utilization of health services, and the aging of the population. Aging’s significant impact on health and pensions is particularly acute in Japan and western Europe, regions that are ahead of the U.S. on the demographic age wave.
Most of Africa and Asia, and much of Latin America (except for Brazil and Chile, which have their own health system and economic challenges) expect double-digit health cost increases this year.
When you’re feeling sick about double-digit health cost increases in the U.S. hitting 10-12%, ponder this: medical inflation in Venezuela this year will hit 25%, and in China, nearly 20%. On the hand, it’s nice to live in Switzerland and France, where health inflation is expected to be 6% and 7%, respectively.
Health Populi’s Hot Points: Health costs aren’t just a problem for small business; consider the jumbo employer who covers health insurance for a global workforce. Medical cost inflation is eating into the profits of even the most profitable global companies. In the UK, even with the presence of the National Health Service, the private sector medical cost increase is about 8%. The global reach of medical cost inflation brings with it an opportunity on a global scale to target population health management. These companies need a disruptive model for disease management. The emerging tools of social media can be used to convene groups of people in disparate places for programs to manage chronic health conditions. Companies like Resolution Health (that’s with an ‘s,’ not a ‘v’), with the recently-acquired expertise of NewSof, are developing innovations in this space.