Medical inflation in Singapore expected to hover at 10%: Aon

SINGAPORE (Nov 14): Medical plan costs paid by employers in Singapore are set to increase at 10% in 2019 unchanged from this year, despite lower projected general inflation of just 1%.

More specifically, cancer and cardiovascular issues will be the top conditions driving up medical plan costs in the republic.

These figures and facts were according to the 2019 Global Medical Trend Rates Report released on Wednesday by Aon plc, the global professional services firm providing a broad range of risk, retirement and health solutions.

Globally, medical plan costs paid by employers are set to rise nearly 8% in 2019, outpacing average general inflation of nearly 3%.

The expected average increase before plan changes in medical and pharmacy cost for employer-sponsored medical plans in 2019 of 7.8% is slightly lower than the 8.4% in 2018 due to employer cost containment measures, tighter procurement of medical goods, new health improvement initiatives and lower rates of projected inflation worldwide.

Medical trend rate in Asia Pacific will decrease from 8.9% in 2018 to 8.6% in 2019. In Hong Kong, medical inflation is expected to rise from 6.2% in 2018 to 8.3% in 2019 with increasing levels of stress and respiratory infections being core contributors to rising costs.

For China, medical trend rate will increase from 5.5% in 2018 to 6% in 2019. The Chinese government's regulation to limit the number of intermediaries in the distribution of pharmaceutical and medical products to two is expected to temper medical inflation in future.

To minimise these costs, companies continue to introduce design measures such as co-payment, dollar limits in plan, limiting certain benefits, and referring employees to cost-effective providers.

Tim Dwyer, CEO, Health Solutions, Asia Pacific, Aon, says, "By focusing only on cost containment, companies are treating the symptoms instead of the underlying causes in relation to the health of their employees. Against the backdrop of an ageing workforce and increasing prevalence of sedentary lifestyles, the time is right for employers across Asia to develop sustainable well-being programmes. This will increase employee engagement, lead to a healthier and more productive workforce and, ultimately, improve business performance."