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Jul 2019

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Higher medical inflation in MEA compared to global average

Source: Middle East Insurance Review | Jun 2019

The Middle East and Africa (MEA) region has typically seen higher medical inflation compared to the global average, according to an annual global medical trend survey by Mercer Marsh Benefits.
 
In 2018, countries such as Egypt witnessed a medical trend rate that stands at 20% largely due to the inflation linked to the devaluation of the Egyptian Pound, said the report. In Bahrain, medical inflation is expected to decrease by 3%, while in Oman, medical projection rates are expected to reach 10% due to the introduction of compulsory medical insurance.
 
According to the survey, 41% of insurers in MEA believed increased non-communicable diseases – such as heart disease, cancers, stroke, chronic respiratory diseases, diabetes, Alzheimer’s disease, mental illness and kidney diseases – would increase employer-sponsored healthcare costs to a ‘very large extent’ over the next three years. In fact, all of the respondents believed that non-communicable diseases could impact healthcare costs to some extent. In the MEA region, cancer has a low frequency, with just 17% of insurers reporting it as a source of claim, compared to the global incidence rate of 47%.
 
The top three causes of claims cost in MEA were respiratory conditions, diseases of circulatory system and endocrine and metabolic diseases which include diabetes. Respiratory conditions account for 56% of claims in the region, attributed to a prevalence of smoking.
 
There is also a heavy reliance on air conditioning, with some living in a fully air-conditioned world. When these individuals venture outside of their air-conditioned environments, they are confronted by variance in temperature. This temperature change can put the respiratory system under pressure, said the report.
 
Another factor driving medical inflation is the growing trend of employees seeking top consultants to treat minor ailments when using their medical insurance. This all-access approach is both a costly and an inappropriate use of resources.  
 
Misuse and medical fraud from practitioners and employees can also impact inflation, said the report. As medical insurance is compulsory and provided by employers, some employees view it as their given right and use it as an entitlement instead of using it when it is actually needed.
Medical plan fraud and abuse – initiated by users, doctors and/or health vendors – can impact healthcare costs in the next three years, according to insurers.
 
By applying cost-containment measures such as introducing flexible benefits programmes as well as lifestyle and wellness programmes, organisations can deliver a more sustainable approach to healthcare. M 
 
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