Advisory Leader, MMB Europe
Amid the COVID-19 pandemic, many people avoided seeking treatment for health concerns. As life began to return to normal, demand for medical care increased dramatically, stressing public healthcare systems.
At the same time, those systems have faced a talent drain, including burnout, migration and early retirement;, labor disputes; and skills shortages, which have added to the strain. Notably, demand for qualified healthcare professionals is outstripping the supply. At the same time, doctors and nurses, burned out by the pandemic, have left the industry. Recruitment challenges and pay freezes have left many governments and health systems struggling to hire and train new talent to replace those who have left.
Mercer Marsh Benefits’ Health Trends 2024 research shows that, in some regions, insurers perceive public health systems as having worsened since the pandemic. Europe is the most dramatic example, where more than one-third of insurers say both the scope (38%) and affordability (35%) of public healthcare has worsened, 48% say the quality is worse and 73% say access to public healthcare has declined. The impact is significant as multinationals in Europe have traditionally relied on social systems, whereas many countries in other regions have adopted a private-first approach.
Latin America also shows worrying signs. Here, insurers say quality (38%), affordability (42%) and access (59%) to public health systems has worsened compared with prepandemic standards.
On the other hand, insurers in Asia have reported improvements, with almost 50% saying that both the scope and quality of the region’s public healthcare systems have improved. Likewise, in the Middle East and Africa, insurers report that both the scope (43%) and affordability (33%) of systems have improved.
Unsurprisingly, given the divergence between regional outcomes, Health Trends 2024 shows the global picture to be less clear, with positive results in some regions canceling out negative results in others. However, one stark finding is cause for concern. Access to public healthcare systems globally has decreased dramatically, with 48% of insurers saying it has gotten worse at a time when the mental and physical resilience of millions of people is being tested as never before.
Of course, this is having a ripple effect on the private sector. Insurers believe affordability has worsened significantly in every market except Latin America.
On a more positive note, insurers found that access to private healthcare has improved in all regions except for Europe, where it has stayed static, likely due to increased demand. More than 50% of insurers across all regions said that scope of and quality of care has also increased in the private sector according to survey findings.
However, this is a double-edged sword that can result in other problems. Private healthcare may have advantages in terms of scope and quality within certain markets, which is why more people rely on and demand it. However, this greater utilization is driving up loss ratios and leading to insurance premium increases. Countries such as Italy that are watching this unfold are seeking alternatives.
Multinationals and local companies should therefore consider the impact on employer-funded healthcare plans, both from a budgeting perspective and in terms of whether the design remains fit for purpose given the public system gaps. Advancements are being made that could support more sustainable access and more manageable costs for diagnosis and treatment in the future. However, some of these advancements could also come with high cost and little value.
Innovation, particularly around the digitalization of healthcare provision, could be a game-changer for public and private providers. However, the Health on Demand research suggests that change is likely to be incremental rather than revolutionary.
Virtual tools and telemedicine are beginning to bridge the access gap while also making healthcare more affordable for consumers. However, insurers are divided on whether this will translate into cost savings for the employers providing healthcare benefits. While 55% of insurers in our survey say such measures have no impact on plan costs, 22% say costs have gone down, and 23% say they have increased.
Despite conflicting perspectives, insurers are optimistic about the role of technology in transforming employer plan costs more generally.
The factors insurers believe would have the greatest impact on plans costsare:
It is not surprising that AI ranked highly in the research as insurers have already seen the power of deploying this technology in non-clinical aspects of delivery, for example, basic customer service. A major focus is reducing incidences of fraud, waste and abuse (FWA) which is increasing the costs of providing private healthcare. AI is being used across claims to assess any FWA issues and could be a transformative in controlling cost and improving service.
We also believe there is even greater potential to optimize clinical navigation and triage. For instance, research reveals that insurers are using AI to help make sure individuals are directed quickly and appropriately to the right person, which would free up valuable clinician time.
One surprise was that pharmaceutical developments did not rank higher in the list of factors with the greatest transformative impact on employer-sponsored healthcare costs. Given recent advances in drugs treating conditions such as obesity and diabetes, and the high number of drugs in development within oncology, we would expect this to have a significant impact on increasing plan sponsor costs.
However, these treatments are something that companies will need to consider carefully, as they will face moral dilemmas in terms of whether they will start paying for high-cost cancer treatments or diabetes medication, the latter of which will incur year-on-year costs.
While there have been promising advances in the use of technology for remote patient monitoring, much more needs to be done to assess the effectiveness of these methods to prove if they are working. For instance, it’s important to examine concepts like “hospital at home” and establish whether this delivers better clinical outcomes for the individual as well as savings for the funder. Remember, cost efficiencies should be considered not just in terms of healthcare savings but the improved business outcomes of a healthier workforce including better productivity, and reduced absenteeism.
There are signs of success. For instance, virtual wards are currently being rolled out across the UK’s National Health Service focusing on the use of remote monitoring of biometrics to achieve earlier discharge of patients. This has delivered positive outcomes, driven efficiencies and improved patient satisfaction.
Some digital health benefits are now becoming standard, such as virtual care or telemedicine services. Our research found that 69% of insurers globally offer telemedicine, with 78% doing so in Europe and 82% in Latin America.
However, the same study shows that insurers are becoming more conscious of emerging needs, such as combatting health misinformation. Fraud, waste and abuse is a key concern, helping to drive adoption of technology such as AI.
We also found that providers are developing more apps and wearable technology to self-manage well-being or specific conditions. However, to avoid app fatigue and confusion, it is critical to focus on user experience and design.
Employers should also play their role. It is crucial to understand the digital developments in your region, how these can be used to improve your healthcare offerings and control plan costs. Deploying effective communications is necessary to maximise value.
Read our research report to discover the fundamental next steps that will allow your organization to lead the way in widening access to high-quality and affordable healthcare and embracing digital health solutions.
 Winfield J. “Caring for People With Acute Respiratory Infections at Home, Through a Virtual Ward in Wolverhampton,” NHS England, 2022, available at www.england.nhs.uk/virtual-wards/case-studies/caring-for-people-with-acute-respiratory-infections-at-home-through-a-virtual-ward-in-wolverhampton.
Advisory Leader, MMB Europe
MMB Multinational Client Delivery Leader, EMEA