Healthcare Analytics The Power of Data

Michael Hilton Chief Actuary, Health & Benefits (APAC) Doug Gibbons, Principal – Global Benefits

Breakout 2:

Global healthcare spending estimated as USD8.7 trillion equivalent to 12% of global GDP

Global healthcare inflation grew at 8.8% in 2015 equivalent to 5.5% higher than global price inflation

For 2016, healthcare inflation globally expected to be 9.1% which is 5.6% higher than global price inflation

At these inflation rates the nominal costs of healthcare doubling every 10 years

Rising costs being driven by:

– Rapidly ageing population – The rise of chronic lifestyle disorders – Overuse of medical services – Expensive treatment advances

The global healthcare crisis in numbers

30 year increase in percentage aged 60 years or over

Source: World Health Organization

150m Diabetes

sufferers in India and China

17% Of US GDP is in the healthcare

industry

7.5m Deaths due to tobacco which is 10% of all

deaths

580m People

worldwide over the age of 65

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Your employee benefit program

Total Premiums

Paid

Insurer’s Profit

Admin Costs

Marketing Costs

Risk Charge

Claims Paid

4

Your employee benefit program

Total Premiums

Paid

Claims Paid

Provide masses of dirty data !

Risk & cost transfer !

Cut employee benefits ! Arbitrary funding of wellness programs ! Siloed approach to Finance & HR issues !

5

Your employee benefit program

Total Premiums

Paid

Claims Paid

6

The value of Aon Pulse – Accountability & Cost Management

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Call to action – every employer needs a targeted strategy

Lifestyle factors are the key lever that employers and individuals can

influence to impact medical costs

A range of mitigating strategies exist to

tackle rising healthcare costs

Healthcare inflation will remain high and above price inflation well into the future

Global companies are waking up to this

situation at the highest levels of

management

An increasing burden of healthcare

provision will fall to the private sector in

most countries

Proposed Actions

Companies should consider some or all of the following; Review the design of programs for optimization opportunities and the ability to share costs

with employees Work with consultants and carriers to get a better understanding of specific claims

patterns and underlying issues Design a program of initiatives aimed at tackling the specific risk factors of your programs

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