“Rising corporate healthcare cost in Singapore” – tell me something I don’t already know, but do we really know what it entails? Detailed by the Health Insurance Task Force (HITF) in its report- Managing the Cost of Health Insurance in Singapore; the rise in cost of healthcare outstripped general inflation on consumer goods and services (30.6% compared to 21.7%). This healthcare cost encompasses the cost of medical treatment and health insurance- part and parcel of corporate health benefits plans.
Similarly, in Willis Towers Watson’s 2016 Global Medical Trends Survey we read that cost of healthcare benefits was projected to increase by 7.9% in 2016 and expected to rise in the next three year.
A round up of reasons for the rising trend is as follows:
- External factors i.e. an ageing population, changing demographics in the workforce and the increase in cost of new medical technologies and research
- Profit motives to sustain healthcare providers
- Rising Integrated Shield Plans (“IPs”) claims stemming from changing medical treatment charges and frequency
- Overuse of care and the contrast of underusing preventive services – a lack of proactive behaviour; these problems are arguably bred out of information asymmetry and limitations in Insurance Product Designs.
So, what has been done to manage costs? It is heartening to find governing bodies band together as the HITF to recommend changes in the healthcare eco system- all in view of managing the cost of corporate health benefits. This eco system spans from consumers (or Patients) to healthcare providers (intermediaries) and payers (Insurers).
We believe the current healthcare eco system to look something like the above (arguably with an end user- consumers after the health partner stakeholder). As a corporate, we know that healthcare cost has rose yet they are piecemeal in most of your organisations’ health benefits plan. The burning question then becomes: “How can my company stay ahead and continue to thrive under this challenge?” It might be helpful to look at current corporate health benefits cost management practices; 2016 Benefits Under the Lens: Identifying the Missing Link by Mercer Marsh Benefits summarised 4 categories of employer cost management practices. One, implementing caps & limits on benefits spend; two, reducing premium costs through pooling & group schemes. Three, provision of healthy lifestyle benefits & wellness programs; and lastly implementing co-payment & front end deductibles.
In a similar vein, the Willis Towers Watson’s 2016 Global Medical Trends Survey expressed typical cost-sharing approaches to manage the medical trend; with coinsurance and deductibles as plan features to encourage better consumption of healthcare as they are responsible for a portion of the cost. Top cost management methods were also highlighted- many have implemented a limit on certain services through capping maximum claims for some treatments. While others have contracted networks for specific care and wellness/well-being features.
Each category of cost management may differ in specifics to different companies but it is useful to be aware of what has been implemented in other organisations that are around you (in Asia!). To end off, we hope with a better picture of the “rising corporate healthcare cost in Singapore” you might be on your journey to find cost management practice(s) for your company’s health benefits strategy - that aligns with your management goals and keep your employees satisfied.