Medical costs for employers around the world are expected to increase over the next five years, according to a poll conducted by a global consulting firm.
The Watson Wyatt Worldwide poll, of 85 insurance companies that provide medical insurance to employers in Asia, Africa, Europe and the Americas, indicates that medical cost increases are outpacing the general rate of inflation in many countries.
"Rising medical costs have rapidly become a global issue that reaches far beyond the United States and other developed economies," said Francis Coleman, a senior international health care benefits consultant with Watson Wyatt. "Many of the factors causing U.S. employers to experience significant increases in their health care costs - such as increased utilization, expensive medical technology and an aging population - are having comparable effects throughout the world."
Of those polled, 71 percent expect higher or significantly higher medical cost trends over the next five years. Additionally, 81 percent of respondents report that medical costs are eclipsing the general rate of inflation in their country.
Insurance companies in Asia and Africa, with the exception of companies in Hong Kong and Singapore, are expecting double-digit increases in employer medical costs in 2008, according to the poll. The same is true in Latin America, except for Brazil and Chile, where costs are expected to increase by around 7 percent. In Europe, most insurers except those in Italy are projecting increases in the single digits, although respondents in all European countries said they expect a higher trend over the next five years.
"Healthcare is fast becoming the most desired employee benefit worldwide, even in countries that support state-sponsored programs," said Ted Nussbaum, North America director of group and health care consulting at Watson Wyatt. "Given the similar factors driving health care costs around the world, multinationals have an opportunity to develop global solutions that engage workers and improve their health and productivity."