Global health insurance enables cost-efficient global benefit management
By Erin Tynan · January 3, 2014
International medical inflation is stabilising after several years of volatility, according to a recently released international private medical insurance report.
The study shows global medical inflation was 8.3% in the past year compared with an average rate of 9.8% for the past five years. The study also reveals that, over the last two years, there have been more stable downward trends following some extreme volatility in previous years.
This is critical for corporations managing global mobility. Working with international medical insurers, they can achieve global benefit management to maximise cost-efficiency. Although medical inflation is stabilising, it does vary widely across the world, so global benefit schemes in coordination with expatriate health insurance can offer great savings.
The study also attributes falling inflation rates to the overall slowing down of the global economy, particularly in China and Asia. The study focuses on 10 countries: Hong Kong, Singapore, China, Indonesia, Thailand, Philippines, Dubai, UK, Kenya and Brazil. It found that over the past five years, Hong Kong has had the highest level of annual inflation (12.2%), while Kenya has the lowest (6.6%). Over the past 12 months, the highest level of inflation occurred in Singapore (11.3%), and the lowest level in Dubai (7.3%), well below the country’s 9.3% five-year average.
What becomes clear, from the study, is that decreasing demand for healthcare is at least in part one of the reasons for the decline in prices. Health is improving in many of the major markets around the world. Part of the reason for this is improved healthcare quality in many emerging markets, along with increased access to healthcare, thanks to medical insurance. However the challenge for many multinationals remains how to capitalise on these improved conditions, provide effective medical benefits and promote better workforce health, while also controlling costs. The solution many companies are finding is to see that expatriates have these benefits regardless of location or position. It is important that expatriates are able to gain access to healthcare in the places that they work, and not have to return home for care –a costly alternative. Global benefit management with the help of medical insurance enables expatriates to avoid making this choice.
There had been an escalation of costs in many markets due to the increased demand for private healthcare, particularly in India, Brazil, Mexico and the Dominican Republic. Of course there will still be issues of volatility in other markets, with the highest levels of premium inflation occurring in Hong Kong, an average of 12.7% annually. On the other hand the countries with the lowest rate of premium inflation were revealed to be Kenya and the Philippines.
All of these changes have ramifications for corporate expatriates and their healthcare choices. British expatriates will need to adapt their health insurance to ensure that it meets the needs of themselves and their families. Filling these gaps with a local insurer may not be practical, as it is clear that access to local healthcare in some markets may prove a challenge. Working with an international private medical insurance company can provide dependable coverage in a wide variety of foreign markets under terms that are familiar to the expatriate.
Aetna's continued success in containing costs has contributed to them being able to set premium increases well below the estimated level of medical cost inflation. In fact they’ve been able to keep premium inflation to a rather modest 5% on UltraCare for the second year running (excluding China and Thailand).