Y2021 Global Medical Trends Survey

Willis Towers Watson (WTW) conducts the Global Medical Trends survey every year. In the 2021
survey, there are 287 leading insurers representing 76 countries that have participated. in our 2021
survey and tThis was conducted from July to August 2020.

The survey tracks information about onmedical costs, identifies key cost drivers and looks at how
costs are being managed. The pandemic has made significant impact on health care utilization and
accelerated the adoption of Telehealth.

We expanded the survey to include a section on Telehealth is included as a there is visible trend in
employers making medical care services more easily accessible and safe for their employees during
such time.

With non-urgent treatments and surgeries being deferred, globally projected health care benefit
costs will take a sudden drop in 2020 before rebounding to 8.1% in 2021, up from 5.9% this year and
7.2% in 2019.

In APAC, we are seeing similar trend, from 7.5% in 2019 to a drop at 6.2% in 2020, and projected
increase to 8.5% in 2021.

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Key drivers for rising medical cost

In Ccomparisonng to with the previous yearsurvey, we observed there is an 8% drop on the overuse
of care by medical practitioners,. It which seems to indicates that more appropriate care is being
provided by medical practitioners.

The top key drivers for rising medical cost are ranked by the insurers as follows:

1. However, mMedical practitioners recommending prescribing too many services or

overprescribing as 65% continues to lead the list, with 65% of insurers ranking this as the top
key driver for rising medical cost.

2. This is followed by oOveruse of care by insured members as the next most significant factor,
withat 55% of the insurers citing this as contributing factor and

3. iInsured members’ poor health habits at 34%.

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Effective cost management approach

For APAC, placing a limit on certain services is approved to be the most effective cost management
tool with a percentage of 71% insurers’ approval. find placing limit on certain services to be most
effective cost management tool. Other leading methods include preapproval for scheduled inpatient
services (57%) and contracted network of providers for all treatment (55%).

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Top 3 medical conditions that are prevalent

Over the years, the leading medical conditions by the cost of claims have been in the following
order:

1. Cancer (80%)
2. , Cardiovascular (56%) and
3. Musculoskeletal (41%), are the leading medical conditions by cost of claims globally, and
these have remained unchanged over prior years.

However, over the next 18 months, the following medical conditions will be in the following order:
insurers are expecting

1. cancer (72%), %)
2. cardiovascular (49%) and
3. mental health (39%) to be top 3 conditions by cost over the next 18 months, arising from
more mental and behavioural issues such as stress- arising from stress.

The top 3 conditions by incidence of claims are Cancer (48%), Gastrointestinal (40%) and
Cardiovascular (36%), and gastrointestinal has moved up into top 3.

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Impact of the Pandemic

As a result of COVID-19, we are seeing insurers removing some exclusions from their policies. The
most significant is APAC, where only 8% of the insurers are expected to exclude pandemic compared
to 27% pre-COVID-19.

TeleHealth

The pandemic has certainly accelerated adoption of Telehealth. With ease of access to a range of
medical care services and effective care, employees would not need to travel to health care facilities,
reducing risks when seeking treatments.

Pre-COVID-19, 54% of insurers globally reported that less than 10% of insured members used
TeleHealth for GP services and 31% indicated none used. This has significantly changed with 4%
indicating none used today.

In APAC, 56% of the insurers indicated none of their insured members used Telehealth to access GP
during pre-COVID-19, and but today, itnow it is at 4%. This clearly reflecting a substantial shift
towards utilisation of TeleHealth.

Even with wider adoption, sSome countries have placed restrictions on services that are legally
allowed to be delivered by TeleHealth. Pharmacy prescribing is most common to have restricted
service.The most common restricted service is pharmacy prescription.

Other restrictions are the following:

1. Others include lLimiting specialist consultations to certain specialty areas and m

2. Medical conditions that can be treated via telehealth. Moreover, e
3. Employers need to stay current on telehealth legislation changes. Employers need to as they
incorporate telehealth into their local benefits programs, to understand on the restrictions
and avoid duplication of services.

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In conclusion

The pandemic has reduced accessibility of health care in 2020 when many countries globally
imposed lock down, resulting in non-elective surgeries and treatments being deferred. With reduced
2020 claim incidences, eEmployers are now expecting positive impact on their 2021 renewals due to
reduced 2020 claim incidences.

On the other hand, to avoid fluctuating benefit costs with lowering premiums for 2021 renewal and
subsequently increasing it for 2022 renewal when claims deteriorate, insurers are providing renewal
options such as experience rating formula and 2-years rate guarantee for underwriting plan over a
longer period instead.

APAC insurers are offering various renewal options to employers where plan experience improve in
2020. These include experience rating, 2-years rate guarantee, premium rebates and premium
holidays.

With prolonged period of many working from home, employers are focusing more on well-being
mental health, and virtual solutions, health screening, vaccinations and re-designing their benefits
program to meet the needs of their employees in such unprecedented times.

Employers need to educate employees on the value of preventive services and maintaining a healthy
lifestyle to prevent overuse of general medical services. Implementing cost-sharing with insured
members by offering TeleHealth is gradually seen as an effective cost management tool. It is
important for employers to constantly educate employees on the value of preventive services and
maintaining healthy lifestyle rather than overuse of general medical services. Besides implementing
some form of cost sharing with insured members, offering TeleHealth is gradually being seen to be
an effective cost management tool.