SINGAPORE: A recent survey conducted by consulting firm Willis Towers Watson indicated that medical expenses may see a significant increase of 10.67% expected in the year 2024. This growth surpasses the rates observed in 2022 and 2023, which stood at 10.33% and 8.44%, respectively.
The survey, released on Wednesday (Nov 29), also sheds light on the broader healthcare landscape in the Asia-Pacific region, suggesting that the upward trajectory of healthcare costs is unlikely to reverse in 2024. According to the findings, the overall average medical cost in the Asia-Pacific region is predicted to rise from 7.2% in 2022 to 9.9% in 2023, with an anticipated continuation of this rate in 2024.
Factors influencing the fluctuation of medical costs in Singapore include medical tourism, high real estate prices, escalating talent costs, and a surge in elective surgeries. The aftermath of the COVID-19 pandemic, coupled with global economic uncertainties, has added stress to the workforce, exacerbating chronic diseases.
The survey anticipates relative stability in Singapore’s medical inflation rate by 2024 after experiencing a sharp increase from 2022 to 2023. Approximately 60% of insurance companies in the Asia-Pacific region predict a continued rise in medical costs over the next three years, underscoring the persistent risk of elevated healthcare expenses.
In response to rising operating costs, the Singapore government, in June 2023, introduced new private hospital charging benchmarks for 29 common surgeries and diseases. Key increases include a 12.1% surge in surgeon fees, a 9.9% rise in anesthesiologist fees, and a 5.7% uptick in inpatient consultation fees. Although these benchmarks are not mandatory, they serve as a valuable pricing tool for insurance companies.
The survey emphasizes that global inflation plays a pivotal role in propelling the surge in medical costs, with fee hikes prevalent in various markets across the Asia-Pacific region, including the Philippines, Malaysia, India, Indonesia, South Korea, Singapore, and Vietnam.
The company behind the survey identifies excessive use of medical services, driven by practitioners recommending an abundance of services and the high cost of innovative medical technologies, from artificial intelligence diagnostic tools to gene therapy, as primary external factors fueling the escalating trend of high medical costs.
Simultaneously, the survey highlights cardiovascular disease and cancer as the two fastest-growing diseases in the Asia-Pacific region, both in terms of claim incidence and associated costs, underscoring the critical need for strategic interventions in healthcare planning and resource allocation.