Healthcare costs for Philippine employers to rise in 2022 — survey

MANILA, Philippines — Filipino employers are expected to shell out more cash to meet the growing healthcare needs of their employees, which is forecast to get costlier this year as pandemic overhang remains.

Based on a survey of 209 medical insurers from 61 countries, global advisory and brokerage firm Willis Towers Watson (WTW) said employer-sponsored healthcare benefits costs, usually insured under insurance providers, are projected to rise 14.4% on average this year in the Philippines.

"Markets and employers are feeling the impact differently. Some have experienced the recovery’s demand for regular medical services in 2021, while others will see it next year or after," said Cedric Luah, international head of health and benefits for WTW.

In Asia, employers should brace for bigger healthcare spending as it is projected to expand by 7.6% this year, as different waves of infection in the globe at different points in time create "considerable volatility in healthcare utilization and costs around the world."

"The pandemic, combined with the changing face of work, has had a significant effect on healthcare needs, delivery of services and the future drivers of medical claims, which in turn will have impact on medical inflation trends," Luah added.

Within the Asia Pacific region, insurers forecast cost trends to widen, such as in Malaysia by 16.2% and in India by 23.5% this year. These medical insurers project healthcare costs to shoot up beyond 2022, as six in ten of them expect higher costs over the next three years, according to WTW.

Healthcare spending in the Philippines has risen, data from the Philippine Statistics Authority showed. In 2020, overall health spending in the country, with public expenditures factored in, rose 12.6% year-on-year to P895.9 billion, especially as the coronavirus pandemic upended the public healthcare system.

The WTW survey also revealed factors that pushed medical costs up for insurers: 64% said overuse of care due to medical professionals recommending too many services or overprescribing. Next were 59% of those polled noted excess of care by insured members, while the final factor was the underuse of preventive services drove costs and spending up, since many opted to delay medical care during this pandemic.

That said, polled insurers in the APAC region attributed cancer, cardiovascular diseases, and musculoskeletal as top three conditions that drove costs up, similar to findings in 2021. Musculoskeletal and mental and behavioural disorders were cited in the survey as two "fastest-growing conditions by the cost they expect to see over the next 18 months."

"In the Philippines, the healthcare system has also pivoted to include virtual mental wellbeing support, largely to ensure that employees receive the quality healthcare support they need as they continue to work from home, both virtually and physically," said Susan La Chica, Philippines head of Health & Benefits for WTW.

"Employers are also reviewing how wellbeing solutions, in general, can be incorporated as a core benefit item, seeking support from insurers or solutions provider like us," she added.