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2020 Global Medical Trend Rates
Employer-sponsored medical plans are spreading quickly and more important than ever for attracting and retaining employees. However, companies continue to face the prospect of rising medical plan costs way above general inflation.
Learn more about the factors driving this increase in medical plan costs and what companies are doing to control further cost escalation.
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8%
The global
average Medical Trend Rate is
Outpacing the average general inflation rate of
3.1%
Medical Trend Rates Around the World
Aon’s 2020 Global Medical Trend Rates report surveyed 100+ Aon offices and is based on Aon professionals’ interactions with clients and carriers represented in the portfolio of the firm’s medical plan business in each country. Medical Trend Rate is defined as the percentage of change in the cost of health care prior to any cost-containment measure undertaken by plan sponsors.
Regional Average Gross Medical Trend Rate
Regional Average Net Medical Trend Rate
8.7%
5.9%
5.7%
3.6%
Regional Average Gross Medical Trend Rate
Regional Average Net Medical Trend Rate
12.2%
6.6%
Regional Average Gross Medical Trend Rate
Regional Average Net Medical Trend Rate
13.1%
7.5%
Regional Average Gross Medical Trend Rate
Regional Average Net Medical Trend Rate
What’s driving increased costs?
Unsurprisingly, the biggest sources of health care costs stem from the cost of treatment – hospitals, health care professionals and drugs. At a global level, the following five medical plan elements were most cited for impacting medical plan costs:
And because these factors will continue in the future – the prevalence of chronic conditions in particular – employers must begin addressing these challenges by optimizing their plan designs, financial strategies, and delivery mechanisms in every region they do business.
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Hospitalization
Clinic/Labs
Prescription
Drugs
Physician
Services
Top Health Risk Factors Globally
Lifestyle-related risks continue to contribute to declining health. This poses a challenge, as these risks persistently contribute to the incidence of chronic conditions, as well as driving supplementary medical plan costs across the world.
Top Medical Conditions Globally
Non-communicable diseases (NCDs) continue to be the leading cause of claims across all regions. NCDs are directly linked to modern lifestyles, and their incidence can be significantly reduced through modification of individual behaviors.
High Blood Pressure
83%
Physical
Inactivity
52%
High
Cholesterol
46%
Bad
Nutrition
44%
Poor Stress Management
38%
High Blood Pressure/
Hypertension
55%
Musculoskeletal/
Back
41%
Cardiovascular
68%
Diabetes
54%
Cancer/Tumor Growth
66%
Detection
Advanced Assessment
Education
Coaching
Wellness Interventions
90
72
81
60
79
0
10
20
30
40
50
60
70
80
90
Detection
Vision Screening
Hearing Screening
Mammograms
Physical Check-ups
% responding most common practices in country
66
49
58
86
Detection
Advanced Assessment
Advanced Assessment
Advanced Check-ups
Heart Health
Nutrition
Substance Use
Level of Fitness
37
56
44
25
37
Education
Education
Communication Materials on Wellness
Wellness Kits
Informational Web Services
Fitness Education
75
63
63
54
Coaching
Coaching
Health Specialist
Health Coaching Management System
Incentive Programs
36
24
54
Wellness Interventions
Wellness Interventions
Healthy Eating
Quitting Smoking/Tobacco Use
Physical Activity
Healthy Weight
Back Care
Reducing Risk for Heart Disease
Employee Assistance Program
64
56
65
55
44
47
50
Global Wellness and Health Promotion Initiatives
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Download the full report to view regional breakdowns and get the insights you need to create your next medical plan with confidence.
Register for our webinar to hear our thought leaders discuss the key findings and larger trends concerning global medical coverage.
Asia - Pacific (APAC)
Europe
Middle East & Africa (MEA)
Latin America and Caribbean (LAC)
6.4%
3.8%
Regional Average Gross Medical Trend Rate
Regional Average Net Medical Trend Rate
North America
rate of inflation.
Use the toggle below to view the gap between gross and net medical trends across different global regions
% responding most common practices in country
% responding most common practices in country
% responding most common practices in country
% responding most common practices in country
Canada
6.0% | 4.1%
USA
6.5% | 3.8%
India
8.5% | 4.3%
Australia
3.5% | 1.2%
China
7.5% | 5.0%
Hong Kong
8.1% | 5.6%
Russia
9.5% | 5.0%
Turkey
25.0% | 10.9%
France
4.0% | 2.5%
Ireland
5.5% | 4.0%
UK
6.5% | 4.5%
Egypt
20.0% | 7.7%
Saudi Arabia
9.5% | 7.3%
UAE
10.0% | 7.9%
Angola
30.0% | 18.9%
South Africa
10.0% | 4.6%
Mexico
12.0% | 8.9%
Puerto Rico
2.0% | 0.7%
Colombia
5.8% | 2.6%
Peru
8.5% | 6.5%
Brazil
15.0% | 10.9%
While countries face their own unique challenges as it relates to health care, rising costs and the increased prevalence of chronic conditions are global phenomena. Employers will continue to face the prospect of added organizational cost and employee productivity losses unless the controllable factors contributing to these patterns are effectively addressed.
Regional Average Gross Medical Trend Rate
Regional Average Net Medical Trend Rate
Regional Average Gross Medical Trend Rate
Regional Average Net Medical Trend Rate
Regional Average Gross Medical Trend Rate
Regional Average Net Medical Trend Rate
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Employers are using a variety of strategies to rein in medical cost increases. Common mitigation methods include cost containment, access and delivery restrictions, plan design changes and flexible benefits, as well as empowering their employees with wellness programs.
In fact, nearly 90 percent of multinational companies reported offering some sort of wellness initiative to help mitigate the increase in costs of medical plans.
Hover over to view wellness programs reported as commonly provided
Maternity
Maternity
And as long as there are aging populations, overall declining health, poor lifestyle habits, continued cost-shifting from social programs to employer health plans and increased use of employer-sponsored plans, medical plan costs will continue to increase.
Hover over to view the top 5 global risk factors
Hover over to view the top 5 global medical conditions
And as long as there are aging populations, overall declining health, poor lifestyle habits, continued cost-shifting from social programs to employer health plans and increased use of employer-sponsored plans, medical plan costs will continue to increase.