When implementing any health insurance plans in your business, plans that worked last year may not be effective in the future. To ensure that you find not only the best health insurance plan for your employees, but also one that is effective in addressing your needs, it is beneficial to look at top trends in the health insurance industry. Pacific Prime is also highly interested in these trends, as they have a strong impact on the benefits and solutions we offer our clients.
In early 2016 Pacific Prime set out to identify these trends and combine them into an overview - read more about this in Appendix I: About This Overview. To achieve this, we interviewed six industry veterans from five of the top international health insurers:
Together, the insurers identified four trends having an impact on health insurance solutions implemented by Human Resource (HR) teams and plan administrators:
All of the insurers agreed that implementing some form of cost containment is necessary for HR and plan administrators to ensure a successful health insurance plan. Two of the most effective and prevalent strategies that were highlighted are:
Starting with a RFP/procurement process
As with many other businesses processes, the RFP (defining your needs, or working with an insurance intermediary to help define your needs, and reviewing proposals submitted by insurers) is an essential component in any successful initiative.
As Bupa Global's Robert Lang explained, "I think the key thing regarding how to keep costs under control is, first of all, to agree on the scheme up front, in detail. I can't emphasize enough the importance for a quality RFP process and engagement with insurers."
When it comes to implementing a successful and efficient health insurance scheme, a sound RFP can offer a number of benefits including:
Bupa Global's Lang explained how a strong RFP can help companies manage costs, "The best way to manage cost is to make sure the data you have got on the scheme is robust and to be very very sure with your insurer and intermediary as to what you need from the scheme, and that during the RFP process you draw confidence that the insurer can manage the cost of the scheme, and you ask for evidence that they can manage the cost."
Better management of health care providers
An insurer who offers better management of healthcare providers can result in a more cost-efficient plan. Kevin Melton from AXA's International Health Business summarized, "Treatment provider network management is critical to negotiating the best prices for treatment at the same time as ensuring quality for customers."
Steve Conway from Allianz Worldwide Care elaborated on this, saying "Insurers often know the healthcare providers out there who provide the right balance of good quality care combined with reasonable costs. Leveraging this knowledge can be an efficient way of managing costs, particularly when it’s combined with other processes. For example, preauthorization of inpatient treatment gives us the chance to check that the planned treatment is necessary, suitable, and in line with standard costs in that particular country."
Cigna Worldwide's Mike Che provided an example of this trend in action, "We are starting to see more direct to network which basically means we can design different plans that, for example restrict the healthcare provider network for a certain large group so that the employee can use the designated and preferred provider which we have a good relationship with. At the same time we have a discount with the provider in order to keep the cost down."
Insurers working with healthcare providers are not alone in enabling effective cost containment, there is another trend that Pacific Prime and insurers have seen developing: Increased use of case management. AXA's International Health Business's Melton explained the benefits it can bring, "Proactive use of dedicated case management can help to review and offer a change in diagnosis which can minimize unnecessary treatment, and provide options for more appropriate treatment and procedures – typically resulting in less invasive and less costly procedures."
Consider this when implementing containment strategies
A balance between cost containment and employee satisfaction should be maintained when integrating cost containment strategies. If you implement one measure simply to save money, this could have a negative impact on your employees and may end up costing you.
Aetna International's Steve Clement provided points to consider regarding containment measures, "From a group administrator perspective, there are a number of factors that should be considered in order to maximize cost savings without interfering with the quality of the cover provided. These include tax deductions, deductibles and coinsurance rates, the benefits included in comparison to those truly needed or wanted by their employee population, reimbursement levels, and any restrictions a plan has, especially for international plans."
Benefits are receiving intense interest from HR and plan administrators because they can have a direct impact on health insurance premiums. It is now common to see many companies implementing new elements of coverage while also trimming coverage in some areas. We have discerned two actions being taken around benefits:
The refining of existing benefits
Of the supplementary benefits offered with insurance plans, there were two that the insurers Pacific Prime interviewed identified as having strong trends: Maternity and wellness.
Maternity care can be incredibly expensive, especially if you seek care from private hospitals. Thus premiums for plans including maternity coverage will often be considerably higher than those that eschew coverage. Despite this, the insurers Pacific Prime interviewed all mentioned that demand for the benefit has not decreased.
Bupa Global's Robert Lang identified the main trend influencing maternity coverage this year, "Some companies are looking to cap this as part of the cost containment process, but it's still a very commonly requested benefit."
This was corroborated by Cigna Worldwide's Mike Che who added, "Actually what we see is that some companies are scaling back maternity a little bit rather than increasing benefit limits. We are also seeing many companies decrease the benefit, putting a cap on it."
The majority of companies still offer maternity coverage, however they are starting to implement or increase caps on the amount claimed, and some are considering increasing the moratorium on maternity claims.
There has been increased demand for this type of benefit, but the definition of wellness is hard for many to explain, as Bupa Global's Robert Lang mentioned, "Wellness is an interesting term and can mean a lot of different things to different employers. There is no question however that it is being demanded. What's interesting is the level of understanding between different employers." This has lead to the definition of wellness being quite broad, and an increasing number of coverage elements are being included within it.
On additional wellness benefits Bupa Global's Lang mentioned, "We are seeing a lot of resonance in our corporate, and certainly individual, schemes around health checks." He continued, "This is something that people feel to be a tangible benefit. 'Ok I paid my premiums, and didn't get sick, but I did get a health check. Now I feel more informed'. This is quite a straightforward thing to provide which is valued."
Steve Clement from Aetna International explained another increasingly popular benefit being requested, "Both members and group administrators are realizing the wellness and financial perks offered by preventative health programmes and we are seeing an increased demand for plans featuring those types of benefits."
Steve Conway from Allianz Worldwide Care identified another trend among companies with existing wellness plans. He commented, "There's more demand on refining the benefits. This is seen particularly on take over accounts where we have to match the current benefit they have."
Conway continued, "We had, for example, a recent case on wellness where [the client] specifically wanted us to include nutritional education under wellness. So, we're not getting a quantum conversation, clients are not saying we want X or Y or Z dollars for this benefit. What we're starting to get is sort of more refinement to the benefit itself."
This implementation and refinement of wellness benefits signals another benefit-centric trend that many will actually consider wellness to be a part of, and that is an increasing shift of focus away from traditional health insurance benefits to value-added services.
Changing of focus from strictly traditional benefits to value-added services
In Pacific Prime's experience, there has been a trend among HR and plan administrators to offer their colleagues "more" when it comes to health insurance. However, it can be tough to define what "more" is. In response to this, many insurers have broadened their service offerings to be more competitive, and offer plans and coverage elements that appeal to group business. Many of these services are simply being referred to as value-added services.
As Allianz Worldwide Care's Steve Conway highlighted, "I certainly think there is a trend for the addition of value-added services in the proposal...We have had requests, specifically in China, that have been more interested in the added services we can bring to the table. When I ask them what they would like to see, they say 'well everybody can provide health insurance, but we want to see what additional services can now be supplied. Having a range of Corporate Assistance Services gives our corporate clients a lot of additional tools to support their employees, particularly those working in more remote parts of the world’."
This is a broad topic with numerous solutions that will be different for each employer. The most common element being implemented now is wellness programs, but there are other increasingly popular coverage elements that the insurers mentioned.
Cigna Worldwide's Mike Che talked about one value-added service that can not only increases satisfaction with a health insurance plan, but also helps to improve the health of members, which often contributes to a company's bottom line: The employee assistance program. Che talked about Cigna Worldwide's program, "For group clients, Cigna Worldwide offers an employee assistance program where employees, especially those coming from the west (Europe, US, etc.), can have easy access to more informative servicing so that they can look after themselves properly when they are away. Cigna Worldwide has a questionnaire for our members to fill in so that our claims employee assistance team back in the US can assess the condition of the member and provide recommendations and health tips to the member on how they can stay healthy. This doesn't affect the underwriting or the claims whatsoever, it is strictly a value-added service."
Robert Lang from Bupa Global explained another value-added service that is being requested by group plan administrators: Intervention services. He explained that these are "designed to proactively help customers through relevant and regular health tips and advice so that people can live healthier lifestyles in the long-term and to enable them to better navigate the health care experience."
Pacific Prime's Managing Director Neil Raymond summarized, "We are being asked a lot to benchmark against other groups, insurers, and even plans offered across the industry. This benchmark does not only just encompass traditional health insurance offerings but also value-added services, which has led to a broad scope that allows HR and plan administrators to know more about their options and solutions."
In Pacific Prime's experience, insurers are now quicker to implement new technology than ever before. Insurers are using tech for claims management, servicing of plans, and accessibility to information, which can affect the success of group health insurance plans.
For group plans, there are three technical elements that the insurers have identified as being not only important, but also requested by HR and plan administrators:
Cigna Worldwide's Mike Che acknowledged the value of online portals: "The online platform is always important so that HR or plan managers can have a user-friendly platform from which to manage or administer their plan. Cigna Worldwide and other international health insurers are not the first to implement this, but it is definitely something our clients find important and have implemented."
Pacific Prime predicts that the next major step for portals is an increased demand for customized portals that display a plan's relevant information, including member management, forms, recommended locations for care, plan details, and more.
The effectiveness of portals has lead to another tech-trend emerging among group health insurance plans: The mobile app.
As Kapil Dhir from Aetna International explained, "We believe that the continuing reliance of individuals on smartphones will play a major role in health insurance related technology demand. Plan members are increasingly requesting the ability to access their member information on responsive devices, anytime, anywhere."
"The power of the smartphone offers efficiencies benefiting clients and their staff," said Dhir. He furthered, "A good healthcare plan will help with retention and morale – having ‘health care in your pocket’ will magnify those benefits."
Some of the more commonly requested features for these apps were highlighted by Cigna Worldwide's Mike Che, "We have also launched the mobile app in response to requests that gives the employee sort of the convenience to administer the plan. For example, they can simply take a picture of their receipt and upload it to the website via the app to make the claim online. This saves a lot of time for them to submit a claim via the app."
Steve Conway from Allianz Worldwide Care discussed other features that one can expect from apps in the near future, "Our MyHealth app allows our members to view their latest policy documents so they can check their cover at any time, even if they are not connected to the internet. The ‘Find a hospital’ feature can be used to locate hospitals nearby, while GPS technology has been harnessed to provide directions to the hospital selected. There is also access to local emergency services’ numbers on a country-by-country basis, and our ‘Medical term translator’ is a useful tool that shows key medical terms in 17 different languages.”
Features like being able to find an in-network provider near you will likely be highly requested, especially for groups who are looking for an effective way to implement cost containment measures which revolve around the selection and limitation of provider networks.
The leveraging of claims and plan data
Regarding data usage, Robert Lang from Bupa Global noted, "There is certainly a trend around data management and reporting. We are certainly seeing employers requesting to have access to holistic group data and information in more real-time. We are seeing companies request data for many different aspects, including everything from service standards to quality outcomes to health care costs to even claims habits."
What are the benefits companies are gaining from better quality data? Kevin Melton from AXA's International Health Business explained, "It helps both the client and insurers understand how to evolve the scheme to best protect and support business ambitions. Understanding and analyzing claims trends by country and condition can help HR to plan their future healthcare strategy and invest in appropriate areas, whether that’s prevention or additional support services."
Many countries now have tougher financial sector oversight, which impacts various insurance industries, including health insurance. As Kapil Dhir from Aetna International explained, "Compliance is already a hot topic, and we expect to see more clients paying attention to it. We have already seen increasing regulation in many of the countries in which we operate, including increased government oversight and report as well as local purchase requirements."
Many of the insurers commented on the issues that differing regulations between countries create. AXA's International Health Business's Kevin Melton commented on challenges for plan administrators, "Markets are becoming increasingly regulated and, unfortunately, in an inconsistent manner. It’s going to be extremely important for businesses to work with established global insurers to ensure that - wherever their employees are – the cover they have is compliant but also portable."
Robert Lang from Bupa Global spoke to the benefits of regulation, "As we have seen with trends in other industries, regulation is essential for good governance and appropriate service provisions to any potential customer. I do think ultimately, what's at the core of this trend is to provide customers with the reassurance that they are entitled to, and that they have got a healthcare provider that is meeting all of the local healthcare requirements of that market, and if for any reason the customer wants recourse, there is a process they can rely upon and trust to ensure that their outcome has been fair and appropriate."
AXA's International Health Business's Melton identified another impactful regulatory trend, "It’s also becoming more common to have one scheme that includes international health insurance alongside regional or local cover for employees that only require basic benefits." In regards to regulation, if HR and plan managers are going to follow this strategy they need to be keenly aware of the regulations in each local region, and if there are any that pertain to international health insurance plans. However, cost savings can be realized, especially if implemented properly - having compliant plans for different types of employees will help reduce long-term management costs while ensuring employees are adequately, and legally, covered.
Pacific Prime agrees with the broad trends identified in this overview and has seen many of the covered elements requested by clients. Over the next couple of years, we predict that the need to manage costs attributed to health insurance will become a much more important focus for plan managers and HR. Meanwhile, the demand for benefits like maternity and wellness will continue to be present but companies will be more than likely looking at ways to scale back coverage on benefits like maternity, while implementing more wellness initiatives.
Technology will play an integral role in the management of plans with insurers implementing feature-filled apps and better data analysis capabilities, which employers can use to identify coverage weaknesses. Ultimately, the speed at which the trends identified in this report are adopted will depend on how well companies introduce and leverage new technology.
It is also incredibly important for all parties involved to be aware of insurance regulations being implemented. With the current economic downturn in many markets, and increasing costs, it is clear that many governments will be implementing stricter regulation.
Going forward, it will become increasingly important for plan managers and HR to work closely with health insurance brokers like Pacific Prime or insurers to ensure that the plans offered strike a balance between the coverage demanded by employees and the budget set by executives.
This overview includes observances and opinions provided by six senior international health insurance experts from five of the top international health insurer who together represent around 80% of all group international health insurance plans sold. Those included in this overview are:
In talking with the experts, Pacific Prime was able to uncover four major trends that are directly related to one single overarching aspect of health insurance, an aspect that has driven these trends to affect businesses of all sizes: The increasing cost of health insurance.
As we determined in our 2015 report 'The cost of health insurance in 94 countries', locations in Asia make up a majority of the top 15 most expensive countries for international health insurance. For example:
While these premiums cover individual plans, the figures in the report do offer insight into the average cost of health insurance in each location. One of the main conclusions that can be drawn from the report is that health insurance is a considerable investment for any individual or company, and in many cases a necessity.
Supporting these conclusions is Pacific Prime's 'International Private Medical Insurance Inflation Report 2015', which found that the "average percentage increase of International Private Medical plans in 2015 was 9.2%, a significant difference from the 7.1% increase seen in 2014." It is expected that the increase for 2016 will be higher, with estimations that it will likely breach double digits.
The findings from our reports, combined with the answers from our experts and feedback from many of our group clients point to the increasing costs of health insurance as one, if not the largest, pain-points regarding effective and efficient health insurance scheme management.
By now, it is a foregone conclusion that premium increases are inevitable. All things being equal, this is unavoidable in the long run, which has led many plan administrators and Human Resource managers to begin looking at ways they can manage this inflation. These actions have given rise to the four major trends identified in this overview.