Medical inflation in India will increase to 11 percent in 2024 from 9.6 percent in 2023 as healthcare costs start to exceed the pre-pandemic levels, according to an international survey by the brokerage firm Mercer and Marsh Benefits, which published the report on its website. A lot of research shows Cancer Among Top Causes Of High Insurance Claims. Let us understand this in depth further.

Global medical inflation rose to 10.1 percent in 2021 and 2022 from the pre-pandemic level of 9.7 percent in 2018 and 2019. It expects medical inflation to be 12.4 percent globally in 2023 and 11.7 percent in 2024 due to the anticipated slowing of inflation.

The report “Health Trends 2024: Getting the right balance between managing costs and meeting employee needs” surveyed 223 insurers in 55 countries. Noting that rising medical costs are a primary concern globally, it has forecasted a double-digit rate increase in over half of the countries.

Diseases like cardiovascular and cancer, it said, are significant drivers of claim costs and frequency. The rising costs, in part, are also because of less attractive public healthcare delivery, requiring employers to opt for “cost-containment mechanisms” within their insurance plans, it said.

With health systems facing disruption from skills shortages as digital healthcare is still in its infancy, insurers resort to cost-containment, providing employers options to make changes. The report highlights that employer-sponsored healthcare provides opportunities “both in offering access to high-quality centers and in embracing digital health solutions”, it said.

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Managing Inflation

It recommends that employers negotiate with insurers to ensure that sensible cost containment measures, such as fraud, waste, abuse controls, and claims-sharing features, are updated and competitive. The study further stresses that insurers’ practices, policy language, flexibility, willingness to innovate, and access to large pools of claims data give them the advantage “in shaping the future of employee benefits, but employers must also shape benefits to meet the needs of their workforces and anticipate, contain and mitigate business risk”.

The survey finds cancer among top causes of high insurance claims along with that 86 percent of insurers globally believe medical inflation had a significant impact on 2023 medical trends, 70 percent expect AI to have a transformative effect on employer-sponsored healthcare over the next five years, and 42 percent of insurers have not adjusted deductible and co-payments in line with inflation and have no plans to do so.

Non-communicable diseases like cancer, endocrine and metabolic illnesses, kidney failure, and heart attacks remain key health risks worldwide. According to the report, they are the top causes of high medical claims costs. Additionally, the World Health Organization (WHO) reports that the prevalence of diabetes has been rising more rapidly in low- and middle-income countries compared to high-income countries.