We're sorry but your browser is not supported by Marsh.com

For the best experience, please upgrade to a supported browser:



News Release

MMB survey finds rising medical costs drive innovation in employer-sponsored health plans

  • Global medical costs continue to outpace general inflation by close to 3x
  • Top three drivers of medical costs are metabolic and cardiovascular risk, dietary risk and emotional/mental risk
  • Insurers respond with investments in quality-focused healthcare solutions and programmes
  • 78% of insurers globally support or consider supporting virtual health consultations to manage member health and contain cost

London, 5  June  2019

According to the Mercer Marsh Benefits (MMB) 2019 Medical Trends Around the World report, medical costs continue to outpace general inflation by close to 3x with the global average 9.7% in 2018. A similar increase is expected for 2019 and even higher for 2020. As the cost of health benefit programmes continues to rise globally, employers have the opportunity to contain cost through smarter plan design and employee access to quality-focused healthcare.

In its fifth year, this latest report surveyed 204 insurers across 59 countries*, assessing how health conditions, supplier factors and consumer habits are driving cost, as well as providing insights into how insurers are responding.

Globally, the top three health risk factors influencing medical cost remain metabolic and cardiovascular risk, dietary risk and emotional/mental risk. On a regional level, there is variation in the top risk factors (see also Table 1):

  • Latin America: dietary risk (85%)
  • Europe: emotional or mental risks (61%)
  • Middle East and Africa: occupational risks (59%), childhood and maternal under-nutrition (24%)
  • Asia: environmental risks (52%) - as the effects of high pollution levels in many of the region’s major cities take their toll

In response, the number of insurers investing in initiatives to enable quality-focused care, to better guide members to the right care options for them more quickly, has more than doubled. Globally, 29% now name this type of investment as a top strategic priority. Insurers are responding by helping members make smarter healthcare choices with 63% of insurers providing education, tools and incentives to drive positive behaviour. The Middle East and Africa had the highest rate of adoption of programmes of this type, with 71% of insurers proactively using such consumer focused tactics with plan members. Globally, 78% are now considering or already support virtual health consultations.

Hervé Balzano, Mercer Marsh Benefits International Leader, observed: “Rising medical costs show no signs of abating. Indeed, according to our research a majority of insurers globally now believe that in 2020 medical inflation will either remain constant or increase.

“The future of work demands healthy and engaged employees. As the cost of providing medical benefits continue to rise, employers should assess how to make the most of plan design, including giving access to quality based care to drive better outcomes. Plans should be reviewed with both cost optimisation and employee engagement lenses.”

To download a copy the report, please click here.


Notes to Editors

*Excludes the US.

Table 1: Insurers were asked to highlight the 3 risk factors that most influence employer sponsored group medical costs

  Rank Global Asia Europe Latin America Middle East, Africa
Metabolic and cardiovascular risk 1 91% 88% 92% 97% 88%
Dietary risk 2 56% 41% 51% 85% 71%
Emotional/Mental risks 3 44% 29% 61% 45% 12%
Occupational risk 4 43% 52% 42% 18% 59%
Environmental risk 5 30% 52% 19% 18% 24%
Tobacco smoke 6 22% 17% 27% 24% 24%
Childhood and maternal under nutrition 7 6% 5% 5% 0% 24%
Alcohol and drug abuse 8 5% 11% 3% 0% 0%
Traffic, violence and safety 8 5% 8% 0% 12% 0%

The report asked insurers for information on the rising cost of medical care in each market as well as the types, costs and frequency of medical conditions that were claimed for by company employees in 2018. As Mercer’s research parameters for the two reports are different, US data has been excluded from this release; however according to Mercer’s National Survey of Employer-Sponsored Health Plans 2018, US employers experienced a 3.6% increase in the average total health benefit cost per employee in 2018.  

About Mercer Marsh Benefits

Mercer Marsh Benefits provides clients with a single source for managing the costs, people risks and complexities of employee benefits. The network is a combination of Mercer and Marsh local offices around the world, plus country correspondents who have been selected based on specific criteria. Our benefits professionals located in 135 countries and servicing clients in more than 150 countries, are deeply knowledgeable about their local markets. Through our locally established businesses, we have a unique common platform which allows us to serve clients with global consistency and locally unique solutions. Mercer and Marsh are two of the Marsh & McLennan Companies, together with Guy Carpenter and Oliver Wyman.