Global medical costs show no signs of declining in 2024

Global advisory company, WTW, has published its most recent medical trends survey, showing medical care benefit costs continue to climb after recording double-digit increases in 2023.

The WTW Global Medical Trends Survey found the cost of medical care jumped from 7.4 per cent globally in 2022 to a record high of 10.7 per cent in 2023. Anticipated costs reported by insurers for 2024 are expected to be 9.9 per cent higher, on average. Over half of insurers surveyed, 58 per cent say they expect to incur higher or significantly higher medical costs in the coming three years.

WTW says the spike in elective procedures, consultations and other medical care which was delayed during the pandemic has pulled back but they add that the severity and costs associated with some conditions have worsened, thanks to missed diagnoses during the pandemic’s lockdown years.

“While some cost increases are projected to ease in 2024, they remain at significantly high levels,” says Linda Pham, senior director, integrated and global solutions with WTW. “The high cost of new medical technologies is a key reason for the persistently high trend.” 

They add that insurers say a leading driver of medical costs also continues to be the overuse of care with many medical professionals recommending too many services or over-prescribing. There is progress in this respect: The number of insurers regarding overuse of care as a significant cost declined from 74 per cent in 2022 to just 59 per cent in 2023. 

Globally, the addition of wellbeing services was reported by 54 per cent of insurers in 2023, followed by 41 per cent who said they added telehealth services during the year.

In Canada, the cost trend increase, net of general inflation, was 3.05 per cent in 2022. This climbed 8.45 per cent in 2023 and is expected to moderate slightly to an increase of 7.74 per cent in 2024. (Gross cost increases were 9.85 per cent in 2022, 12.35 per cent in 2023 and 10.13 per cent in 2024.)

“In Canada, the medical trend is largely driven by prescription drug utilization,” they write, noting that physician and hospital costs are covered in the country. “Prescription drugs make up roughly 60 per cent of healthcare costs. The primary driving factors for trend in drugs is new high-cost specialty drugs.” They add that obesity drugs and off-label use of diabetes drugs for weight loss have also contributed, offset by the increased use of biosimilar medications.