Willis Towers Watson’s Survey Expects Medical Costs in Indonesia to Increase up to 12% in 2021


The medical trend seen rising next year, following a slowdown in cost increases this year due to the COVID-19 pandemic.

JAKARTA, Indonesia, Dec. 8, 2020 /PRNewswire/ — Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company, announced it expects medical costs in Indonesia to increase up to 12%. Willis Towers Watson announced the findings following an in-depth report which cited the economic impact of COVID-19, a slowdown in employer-sponsored health care benefit costs and delays to nonurgent treatments as causes for the expected increase. 

Medical insurers in Asia Pacific’s health care benefit costs are projected to rebound to 8.5% in 2021
Medical insurers in Asia Pacific’s health care benefit costs are projected to rebound to 8.5% in 2021

The full ‘2021 Global Medical Trends Survey‘, found that medical insurers in Asia Pacific’s health care benefit costs will experience a sudden drop in revenues in 2020 that is expected to rebound to 8.5% in 2021, up from 6.2% this year and 7.5% in 2019.

In Indonesia in particular, a nationwide decrease in private healthcare utilization due to the pandemic has slightly lessened the medical trend rates, from 10.2% in 2019 to 10% this year. As we are preparing clinical vaccine trials, the survey estimates an increase of 12% in 2021

Commenting on the findings, Dewita Anggraeni, Head of Health & Benefits, Indonesia at Willis Towers Watson said, “The pandemic undoubtedly had a major impact on slowing trend increases this year in Indonesia. As the COVID-19 has reduced people in having non-emergent surgery and elective procedures, the decline also caused by the increased utilization of BPJS Kesehatan (Universal Health Insurance) especially for chronic and critical illnesses and other ongoing costly treatments.”

Similar to Indonesia, most countries also experienced lower cost growth this year. However, it is expected to be short-lived, with costs expected to rebound in 2021, according to the report significantly.

 “Given the state of the pandemic differs drastically from country to country for the foreseeable future, we expect to see significant volatility of medical cost in 2021. Other uncertainties as a result of COVID-19 will be whether or when a vaccine will become available next year, who pays for it and the extent of its availability, as well as how COVID-19 testing and treatment costs for 2021 will continue to be split between government, insurers and employers,” added Dewita.

The top three factors affecting medical trends in 2021

The 2021 Global Medical Trends Survey was conducted between July and September 2020, reflecting a survey of 287 leading insurers from 76 countries, with 29% respondents are from APAC countries. 

The report finds that close to half of insurers (49%) surveyed in APAC expect medical cost increases to remain constant over the next three years, while 40% expect costs will continue to increase. 

Cancer (79%) ranks first among the top three conditions affecting medical costs in the APAC, followed by cardiovascular diseases (76%) and musculoskeletal and connective tissue disorders (42%). 

Similar to last year, the overuse of care by medical practitioners, suggesting too many services is cited as one of the most significant cost drivers, as noted by 75% of the respondents. At the same time, over half of respondents (55%) saw insured members overusing care as the second condition, causing prices to rise. 

Moreover, the report looked at the top three factors outside the control of employers and vendors impacting healthcare costs. Healthcare providers’ profit motives emerged first place as indicated by 52% of the respondents, followed by higher spend on medical technology (49%) and control and treatment of epidemics and global pandemics (37%). 

“The pandemic has greatly improved an individual’s consciousness of personal healthcare awareness and hygiene. It has also accelerated the adoption and use of telehealth, which could help to offset potential higher costs and provide a more efficient way for those insured to access and use health care in the future. Also, BPJS Kesehatan provides coverage of all medical treatments related to COVID-19, which helps to stabilize rates despite an expected continuing demand for private health care,” added Dewita.

About Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas – the dynamic formula that drives business performance. Together, we unlock potential. Learn more at https://www.willistowerswatson.com/

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