Health Care Inflation Is Globalized

As we continue to address the issue of health care simplification and reform, it’s instructive to consider health systems outside the United States. Among other considerations, a major criticism directed at American health care is that health care in other industrialized countries is delivered at significantly less cost. Evidently, this becoming less and less the case- health care inflation appears to be globalized.

Watson Wyatt this month released survey results from a survey of 85 insurance companies that provide medical insurance to employers throughout Asia, Africa, Europe and the Americas.

They found that the problems the U.S. faces regarding medical cost increases are unique, and are reflected around the globe. 71 % of respondents project increased rates of inflation for medical costs during the next five years. 81% indicated medical costs out stripped their country's overall inflation rate. In fact, of the eighteen major countries selected for their analysis, the U.S. ranked in the middle, not the high end, for projected 2008 medical cost inflation rates.

Ted Nussbaum, Watson Wyatt's North America director of group and health care consulting tells us "Health care is fast becoming the most desired employee benefit worldwide, even in countries that support state-sponsored programs. Given the similar factors driving health care costs around the world, multinationals have an opportunity to develop global solutions that engage workers and improve their health and productivity.” 

Below are the actual 2006 and 2007 medical costs trends, and 2008 projections released by Watson Wyatt, for selected countries:

* = tie