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Why are medical services getting costlier? 

In Malaysia, there is a reoccurring theme with employer-sponsored medical benefits or employee medical insurance costs increasing annually, with 2022 having no exception. 

According to findings in Mercer Marsh Benefits, prices rose by 13.5% in 2020 to 12.60% in 2022, four times the predicted general inflation rate for the region.

What Is Malaysia's Inflation Rate And Medical Inflation Rate?
A breakdown of what each data in the charts represent:

Inflation Rate: The rate at which the general prices for goods and services rise in a given country. A volatile metric, inflation, can increase and fall rapidly depending on economic conditions and the measures a government chooses to control or counteract.

Medical Trends Rate: Provides information on annual increases in medical plan (outpatient and inpatient) unit costs that are anticipated to be technically required to address projected price inflation, technology advances in the medical field, plan utilisation patterns, and cost-shifting from social programs to private insurance.

Why are the factors of high medical inflation ?
Here are a few reasons why medical costs are increasing in Malaysia.

1) Increased utilisation of health services, the overuse of care by insured members continues to be the second most important driver of medical expenses

2) Unhealthy lifestyle choices, employers indicate that the underuse or lack of preventive services is a significant cost driver. This can be attributed to delayed or avoidance of medical care during the pandemic.

The Centers for Disease Control and Prevention has identified non-communicable diseases (NCDs) such as heart attacks, stroke, and diabetes as the leading cause of mortality globally, accounting for 62% of deaths in Southeast Asia alone.

Here are the leading healthcare conditions that had the most frequent claims in 2021
• Cancer (55%)
• Circulatory system Disease (43%)
• Covid-19 (36%)
• Respiratory diseases (47%)
• Gastrointestinal diseases (36%)

It doesn't come as a surprise as Malaysia has the highest prevalence of obesity among adults in Southeast Asia, with 50.1% of our adult population reported to be overweight (30.4%) or obese (19.7%) and has reportedly cost the economy RM 12.88 billion, according to the report from the MOH.

3) Medical advancement, the fusion of technology and medication, has vastly improved healthcare quality. However, this also means that medical costs are higher to fulfil the demand for qualified health professionals and medical instruments.

What can corporate do to counter expensive medical inflation?

As an HR responsible for compensation and benefits, you must provide the best care to your employees with the budget allocated to you by your management.

Here are three strategies you can use to reduce cost using HealthMetrics.

I. Set a Budget Limit On The Clinic Visit Amount

This feature allows HRs to control how much an employee is entitled to spend per visit. Setting a budget limit will enable you to prevent overcharging by clinics and ensure that employees don't take unfair advantage of the benefits you have provided to them.

You can also set different budget limits for other benefit pools.

II. Using The Panel Access Policy (Bell-Curve)

The latest addition to HealthMetrics' extensive list of features is the new Panel Access Policy (Bell Curve). 

Under the unique Panel Access, GPs are grouped into four different pricing categories (as shown in the image above).

The pricing categories update dynamically every month through actual claims data from nationwide transactions of most common employee healthcare claims – such as flu and fever.

As an HR, you can now control access to GP panels based on average prices, control access to GP panels based on average costs, and manage access for all panel types based on specific areas and locations. 

This allows you as an HR to control access not only based on price but based on-site as well.

III. Take Advantage of Co-Payment

If your costs are high due to your employees' visiting clinics for unnecessary small matters, then taking advantage of the co-payment feature might curb that behaviour.

The co-payment enforces employees to pay a small contribution fee each time they visit a clinic. This amount is set by you using one of the two following options:
Fixed Amount Per Visit (Example: RM 5 per visit)
Fixed Percentage of Overall Bill (Example: 5% of the total bill)

The co-payment feature will thus encourage your employees to only visit clinics for essential matters. The amount of RM 5 mentioned above may seem small to pay in hindsight, but we have seen a significant impact from it when it comes to reducing cost
These cost-containment features are available through the HealthMetrics professional and advance subscriptions. If you wish to take advantage of them, contact [email protected] or fill in the form below to get started.

Conclusion

All in all, preparation is vital to ensure your businesses stay afloat during the coming recession wave. We must also realise that digitalisation is inevitable.

We can leverage it to propel businesses to another level in making things efficient, especially as big data can help business owners predict and plan their operations strategically.
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Copyright © 2020 • HealthMetrics (Reg # 201501045173) 
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