Delicate balancing act required to deliver universal healthcare coverage to citizens and engage with the private healthcare sector, according to Aon Asia Healthcare Trends Report 2017/18
SHANGHAI, CHINA – Media OutReach – 25 JUNE 2018 – Aon plc (NYSE:AON), the leading global professional services firm providing a broad range of risk, retirement and health solutions, has launched its inaugural Asia Healthcare Trends Report 2017/18.
The report examines medical inflation, its key drivers, and prevailing cost management strategies by insurers across 11 markets in the region. Each market is also allocated an Aon Medical Inflation Index (AMII) score, which compares the average medical inflation rate in each location for 2017 and 2018 with a projected inflation rate for the next three years. The AMII score for China is 73–better than the regional median of 82.7 and the 3rd lowest of the markets surveyed.
Nevertheless, medical inflation forecast for 2018 is 8.2%, up slightly from the 7.2% forecast for 2017. 40% of insurers also predict a significant increase in healthcare costs over the next three years.
Trends in cost management
Asia is being hit by a convergence of several unfavourable factors including a rapidly growing middle class with heightened expectations of healthcare outcomes, an ageing population, and high incidence of non-communicable diseases such as diabetes and cancer. In China, non-communicable diseases accounted for 88.7% of total deaths in 2015, according to the World Health Organisation (WHO)–or three million premature deaths in the country each year.
This prevalence of non-communicable diseases decreases quality of life for Chinese citizens in their most productive years, which has direct and adverse impact on the economy. The report also states that outpatient costs are the primary driver of inflation, with diagnostic costs outweighing medical fees.
Lucy Liu, Head of Health and Retirement, China, and Deputy General Manager, Aon-COFCO, says: “While the government’s primary focus is to provide affordable, quality healthcare to a population of 1.3 billion undergoing rapid disease and demographic transition, doing this in a cost-sustainable way requires a delicate balancing act. Furthermore, the ageing population in China warrants special attention as the elderly population (aged 60 years and above) is expected to reach 240 million by 2020–putting pressure on a public healthcare system that is already stretched.”
On a positive note, China is one of the most advanced markets in Asia in terms of implementation and scope of employee wellness programmes. Companies are working with medical insurers and healthcare providers on chronic disease management programmes, and encouraging their employees to participate in wellness programmes.
Tim Dwyer, CEO, Health & Benefits, Asia Pacific, Aon says: “At a macro level, the Chinese story at an economic and social level is unparalleled in modern history. On its way to becoming the second largest economy globally, more than 500 million people have been lifted out of poverty. Another 850 million people are forecast to join its middle class by 2030. With this rapid growth, a perfect storm is being created of an ageing population, beset by a high rate of chronic illnesses, competing for scarce healthcare resources. With chronic disease management programs currently in their infancy, there is a compelling need for medical plan insurers, healthcare providers and employers to place increased emphasis on managing employee wellbeing in order for the goal of equitable, affordable care to be realized”.
About Aon Asia Healthcare Trends 2017/18 Report
The inaugural Aon Asia Healthcare Trends 2017/18 surveyed insurers across 11 different markets, and provides quantitative analysis of key risks and cost drivers on a market-by-market basis and prevailing cost management and employee wellness initiatives. This data is supported by a narrative that provides an appreciation of the market fundamentals that are driving the growth of pharmaceutical and diagnostic industries, and the healthcare labour force participation rates amongst other key variables.
To download the full report, please visit: http://www.aon.com/apac/study/2018/aon-asia-healthcare-trends.jsp
Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.
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