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Mon 27 Jan 2020 02:55 PM

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GCC medical costs set to outpace inflation three times over

Mercer Marsh Benefits report says top health risk factors influencing medical costs are respiratory conditions, diseases of the circulatory system and endocrine and metabolic diseases

GCC medical costs set to outpace inflation three times over

The top three causes for the increasing costs the region faces are the over prescribing of low-value health tests and procedures, high cost pharmaceuticals and overly lengthy inpatient stays.

Medical costs are set to continue to outpace general inflation by close to three times with the regional average expected to be 13.6 percent in 2019, according to the Mercer Marsh Benefits Key Medical Trends report.

This is anticipated to grow to 14 percent in 2020, the report said, adding that as the cost of delivering health benefit programmes rises across the region, employers are working to develop smarter healthcare plans and embrace wellness and preventive medicine.

It said that regionally, the top three health risk factors influencing medical costs are respiratory conditions, diseases of the circulatory system and endocrine and metabolic diseases.

Type 2 diabetes remains a significant concern across the Middle East, with Saudi Arabia having the highest prevalence of the condition (31.6 percent) followed by Oman (29 percent), Kuwait (25.4 percent), Bahrain (25 percent), and the UAE (25 percent).

With several countries in the region looking to introduce mandatory healthcare regimes, employers will need to combat the over-use of benefits and the under-use of primary care, the report added.

The report noted that the commercialisation of the hospital sector, together with the increasing availability of healthcare is driving an uptake in healthcare services and the resulting costs.

Employers face a challenge in balancing the cost of healthcare provision with the quality needed to meet regulatory standards and employee needs, it went on to say.

It claimed the top three causes for the increasing costs the region faces are the over prescribing of low-value health tests and procedures, high cost pharmaceuticals and overly lengthy inpatient stays.

Julio Villalon Garcia, Mercer Marsh benefits leader, Middle East & Africa, said: “Although there are clear challenges facing us, the region is making significant investment into tackling some of the issues raised in this report, specifically by encouraging employees to take greater personal responsibility for their own well-being through more visible support for preventative care.

"The MEA region is a global leader in adopting virtual health consultancies and telemedicine, and 88 percent of our respondents are either considering or already support this new technology – the global figure is 78 percent.

“In time, I expect employees to develop a better understanding of their own healthcare needs. This, together with improved access to preventive care and simpler and more user-friendly technology, has the potential to allow medical inflation to be better managed.”

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