U.S. health plan sponsors are getting a grip on cost control. Outside the U.S. it's a very different story.
A study that sought information from medical insurers worldwide by Willis Towers Watson found that, overall, annual health care cost increases are the way of the world. Costs rose 7.5 percent globally in 2014, 8 percent last year, and are expected to rise more than 9 percent this year.
The recent increases in U.S. health care spending have averaged around 5 percent, according to earlier research by the consulting firm. While European nations have also managed to hold down increases to just over the 5 percent bar, other regions haven't been as successful.
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In the Americas excluding the U.S., increases will continue to be in the double digits. Last year, the non-U.S. Americas experienced a 13.3 percent hike; this year, 15.3 percent is the projected increase. Double-digit increases are also being reported in the Middle East and Africa. Asian costs are expected to rise by nearly 8 percent this year, compared to just over 6 percent last year, the consulting firm's report said.
"Hospital and inpatient services are the highest expenses driving the increases, although all other services are not far behind," the report said. "When asked for the most significant cost-driving factors outside the control of employers and vendors, more than half cited the high cost of medical technology, followed by providers' profit motives." Insurers tended to point the finger at too many unnecessary services recommended by providers.
The study identified a positive global trend in the making: a movement to a globally accepted coding system as opposed to a local in-house coding system. More than four in 10 respondents said they are using ICD-10 as a coding system to adjudicate medical claims; another 22 percent use ICD-9.
"These systems make it easier for multinationals to get consistent claim data reports and facilitate data management," the study's authors said.
Other findings of note from the study included:
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78 percent of respondents said they place limits on certain medical services to help manage costs;
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57 percent use contracted networks;
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56 percent require preapproval for scheduled inpatient services;
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58 percent offer a personal health risk assessment/appraisal program either directly or through a partner, and another 14 percent plan to offer a program in the next 12 months;
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58 percent offer biometric screenings.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
