Dubai: Feel like you are paying more each time you pay a visit to the doctor? That’s because you are.
A new report finds that inflation in the UAE’s health care sector came to 11.5 per cent during 2018, which is nearly three times that experienced by the overall economy. It essentially means residents are indeed shelling out more at hospitals and clinics.
And the spike in costs is going to continue — 50 per cent of insurers surveyed in the Mercer Marsh findings reckon that there will be an “even bigger medical inflation increase in 2019”. (For the record, 2017 saw another 11.5 per cent increase in these costs.) It’s not insurers and the insured alone who are hurting because of the higher costs. Employers bear the brunt because they are the ones who have to pay off the higher premiums.
Organisations should manage expectations and costs of their employee health care by offering an incentive for patients to seek the correct treatment pathways for their health issues.
“Higher medical spend without demonstrable return on investment will continue to be a challenge for employers,” the report states.
Already, there’s resistance from many employers over these mounting bills. They have countered by reducing the range of medical benefits available to employees by enrolling them in basic or low-value yearly policies. Insurers on their part insist that employees can seek treatment only at pre-approved hospitals or clinics, where they get preferential rates.
“With mandatory medical care for employees, the costs associated with health should be of keen interest to organisations — and the need to manage this expense should be a priority,” the report adds. “With medical claims increasing at a faster rate than the premium covered rate now is the time to act.”
Medicine prices remain in check
Thankfully, drug prices have not been as much of a factor in pushing up costs. It shows that efforts to keep these prices in check are bearing results.
“Both the government and employers in the UAE are working to reduce the impact the cost of medicines has on medical inflation,” said Julio Garcia- Villalon, Benefits Leader at Mercer Marsh, Middle East and Africa. “This is collaborated by the introduction of legislation in Abu Dhabi on the use of generic drugs over branded.
“The UAE government has also put in place safeguards to monitor the price of medication. There is a growing trend among employers looking to move towards more use of generic drugs too.”
So, if drug prices are kept in check, where are the higher costs coming from? The Mercer Marsh report points the finger at residents opting to get checked by consultants rather than start with GPs (general practitioners). This habit has only gotten worse with mandatory health insurance.
“There is a growing trend where employees expect to see top consultants for minor ailments when using their medical insurance,” the report finds. “This all-access approach is both a costly and an inappropriate use of resource.
“Organisations should manage expectations and costs of their employee health care by offering an incentive for patients to seek the correct treatment pathways for their health issues.”
Putting a clip on medical frauds
Insurers are clamping down on “medical frauds”, which if left unchecked can severely impact health care costs and the industry as a whole. In the region, 54 per cent of insurers reported performing “coinsurance” as a way to keep the insured from heading for the hospital at the first sign of a cough or a runny nose.
“This means that measures are being taken to reduce the cost of outpatient usage on the employee’s end,” the report says. “According to employee feedback, practitioners may also receive bonuses when certain referrals are made. The temptation is there for practitioners to refer employees with minor ailments on for unnecessary treatments, such as blood tests and MRIs for simple headaches — an act that is costly for insurers.
“Medical plan abuse — initiated by users, doctors and/or health vendors — can impact health care costs in the next three years according to insurers.”
Non-communicable diseases raise the pressure on costs
More cases of heart diseases, diabetes or cancer will have an incalculable impact on health care costs in the near term. In fact, 41 per cent of insurers believe this would raise employer-sponsored health care costs to a “very large extent” over the next three years. And all of them believe such diseases could impact health care costs to some extent.
“The likelihood of dying prematurely from non-communicable diseases in Mena is 19 per cent compared to 12 per cent in higher income countries globally,” the Mercer Marsh report adds. “Since young people of ages 10 to 24 account for an average of 25 per cent of the MEA (Middle East and Africa) population, it is crucial to address risk behaviours such as poor diet, lack of exercise, and harmful use of alcohol or tobacco to this young cohort to change the trajectory of non-communicable diseases in the region.
“When climatic elements are added to the equation, such as high temperatures in the region, for instance, this can lead to less active lifestyles, and therefore can result in obesity and related diseases.”