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2017 Global Medical Trends
Survey Report
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Executive summary
The cost of medical care continues to rise across the globe
with no light at the end of the tunnel, according to insurers
responding to the 2017 Willis Towers Watson Global Medical
Trends Survey. Although trend has slowed in some countries,
it is still mostly above infation. Insurers attribute the bulk
of the cost to hospital/inpatient services, basic medical/
outpatient services, provider and employee behavior, new
medical technology and rising provider profts.
What are employers doing in response to contain cost
Most turn to traditional strategies — cost sharing with
employees (e.g., coinsurance and deductibles) and cost
management strategies led by contracting with provider
networks and requiring preapprovals for scheduled inpatient
services. However, with concern growing over afordability
for employees and recognition that a healthier workforce is a
more productive workforce, we are beginning to see greater
investment in programs that empower employees to manage
their own health with strategies like ofering preventive care
and well-being initiatives.
Key fndings
(weighted by GDP per capita) in 2017, up slightly from 7.3%
in 2016 and 7.5% in 2015. (To lessen the efect of market
size and currency issues, we have weighted regional and
global trend rates using GDP per capita as the weighting
factor.)
infation, while Europe continues to have the lowest trend
due to the level of coverage provided through their social
security systems.
trend to be higher or signifcantly higher over the next three
years. The Middle East and Africa region is somewhat more
optimistic, with 53% of insurers expecting trend to remain
about the same level for future years without increase and
5% expecting a decline. The U.S. is expected to continue
to trail global trend, although uncertainty continues to grow
since the presidential election.
drivers: hospital/inpatient services and basic medical/
outpatient services, including pharmacy; providers
overprescribing too many services and employees seeking
inappropriate care; and new medical technology and higher
provider proft.
nations only, continue to increase globally, with
cardiovascular disease, cancer and respiratory illness
projected by all insurers worldwide to be the top three
diseases for at least the next fve years.
traditional methods of cost management and cost sharing
with employees. Notably, we additionally see employers
ofering preventive care and empowering employees to
take responsibility for their own health. Our survey data
(as reported by insurers) also show well-being programs
are ofered by nearly half of employers in Europe and by a
majority of employers in the Americas — a signifcant rise
from last year’s Global Medical Trends research. Also on the
rise are health risk assessments, second medical opinions,
biometric screenings, and lifestyle and health education.
Moreover, these interventions are all projected to grow, some
signifcantly, in the next year.
2017 Global Medical Trends Survey Report
Employers continue to respond to higher
costs primarily with traditional methods of
cost management and cost sharing with
employees.
3 2017 Global Medical Trends Survey Report
About the survey
Willis Towers Watson’s Global Medical Trends Survey
was conducted in October and November 2016, and
refects responses from 231 leading medical insurers
operating in 79 countries
(Figure 1)
. To lessen the efect
of market size and currency issues, we have weighted
regional and global trend rates in this survey report,
using GDP per capita as the weighting factor. Most
participants have at least a 10% share of the group
medical insurance market in their country. This year,
we have included a snapshot of the U.S. medical trend,
drawn from other Willis Towers Watson research. For
further details on this complex market, we would refer
you to other specifc U.S. Willis Towers Watson research.
Figure 1. Participant prole
Americas
Asia Pacic
Europe
Middle East/Africa
27%
23%19%
31%
employers receive information they can use in strategic
planning, is headed in the right direction, especially for
larger employers. A large proportion of insurers indicate
they can provide data on the top 10 health conditions
to clients with over 500 covered lives. The adoption of
ICD-10, which provides consistent comparisons of claims
experience, continues to improve slowly. However, there
is still much room for progress on the availability of data,
particularly in Europe, where even aggregate statistics are
rarely provided.
the number of insurers globally that include treatment for
mental health and stress in their standard medical insurance
programs has improved signifcantly to 61%, from 50% in
2014. However, many insurers continue to exclude treatment
for alcoholism and drug use (72%) and HIV/AIDS (43%).
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Medical trend by region and country
More than half of health insurers globally expect trend to
be higher or signifcantly higher over the next three years
(Figure 2).
The Middle East and Africa are somewhat more
optimistic, with 53% of insurers expecting trend to remain
about the same level for future years without increase and
5% expecting a decline.
Asia Pacifc
Asia Pacifc continues to ratchet upward with a weighted
trend that averaged 7.1% in 2015, 7.7% in 2016 and a projected
8.6% in 2017
(Figure 3).
China. Once again, medical trend signifcantly exceeds
general infation. Given the country’s modernization and
higher level of private medical awareness and utilization, we
expect the gross trend to continue at or above 10% in the
near future.
Hong Kong. The high trend rate is mainly attributed to
overprescribed medical services, including preventive and
diagnostic tests covered by insurance. Where members
opt to receive the services through inpatient rather than
outpatient means, higher hospital and private doctor practice
costs occur, leading some insurers to challenge costs and
service delivery.
India. With some of the highest medical trend rates in Asia,
insurers try to adjust premiums to appropriate levels and
correct the historical underwriting approach that allowed
medical coverage to be a loss leader subsidized by other
insurance. Aided by some regulatory action, medical
premiums have been on an upward trend, jumping 5% in the
last three years.
Singapore. Lower medical trend in recent years can be
attributed to increased market competition and possibly the
introduction of Medishield Life, which may have diverted
some claims from the private medical sector to this
government plan.
0%20%40%60%80%100%
Middle East/Africa
Europe
Asia Pacic
Americas
Global
Figure 2. How do you expect the medical trend in your
overall book of business to change over the next three
years compared to current rates
1 7 35 47 10
1 5 41 48 5
7 38 52 3
5 53 31 11
Signicantly lower
Lower
Higher
Signicantly higher
About the same
6 42 46 6
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Figure 3. Global average medical trend rates by country, 2015 – 2017
Gross cost trendNet cost trend (net of general infation)
201520162017201520162017
Global***7.5%7.3%7.8%5.7%5.1%5.2%
Asia Pacifc7.1%7.7%8.6%6.1%6.6%6.7%
Australia7.8%6.4%6.5%6.2%5.1%4.4%
China10.3%10.5%10.3%8.8%8.4%8.0%
Hong Kong*9.1%9.1%9.6%6.1%6.6%7.0%
India15.0%18.0%20.0%10.1%12.5%14.8%
Indonesia8.0%10.0%11.0%1.6%6.3%6.8%
Malaysia13.8%1