The Conditions Driving the Rising Global Medical Trend Rate

The Conditions Driving the Rising Global Medical Trend Rate
November 15, 2023 23 mins

The Conditions Driving the Rising Global Medical Trend Rate

The Conditions Driving the Rising Global Medical Trend Rate

Medical costs continue to rise around the world. Aon’s Global Medical Trend Rate report provides insight into what conditions are driving these increases.

Key Takeaways
  1. The medical conditions contributing to upward rates have stayed relatively consistent over the past few years.
  2. Cancer and cardiovascular diseases are the top conditions driving claims — both globally and within each region.
  3. Understanding the conditions behind rate increases can help companies develop a long-term strategy to control costs.

Amid volatile economic conditions, including inflation and the lingering effects of the COVID-19 pandemic, companies budgeting for their medical plans were already expecting to pay more for their programs than in prior years. Part one of this series examined the risk factors behind the increase in costs, as revealed in Aon’s Global Medical Trend Rate report. 

While those risk factors are all important, they do not tell the whole story. The medical conditions that drive claims are also key to understanding where and why the trend rate has risen.

Better Informed

Conditions Driving the Medical Trend Rate Stay Consistent

The top five conditions driving the medical trend rate higher have remained relatively consistent over the past few years, though the top two conditions — cancer and cardiovascular diseases — switched places for 2024. As with risk factors, that doesn’t mean these conditions are the only drivers of the medical trend rate, or that all of them are the same globally. 

There is much that is not understood about the causes of cancer, apart from some behavioral triggers like smoking, making effective prevention a challenge. That’s one reason why cancer/tumor growth continues to be a major driver of claims. Successful cancer treatment often depends on early detection and timely intervention. Delays in these actions are associated with poorer prognosis, leading to higher treatment costs. Screenings, as well as interventions (surgery and radiation treatment), also require timely in-person interactions. Additionally, hindered access to care and delay in seeking care as a result of the pandemic are likely amplifying cancer treatment costs. 

Cardiovascular issues include heart attacks and strokes. These are not only the most common conditions, but also usually the most expensive, given the urgent interventions needed to prevent long-term damage or death. Globally, more than 18 million people1 die from cardiovascular disease each year. High blood pressure, poor stress management, obesity, poor nutrition and lack of physical activity are all major risk factors for cardiovascular disease. 

It is worth noting that hypertension shows up as both a risk factor and condition requiring treatment. A factor driving hypertension’s status as a top claim condition is the disparity in the cost of treatment drugs. These drugs can be up to 40 times as expensive depending on where they are sold.2 

Diabetes is underdiscussed as a driver of claims. Patients with long-term diabetes can encounter complications in multiple systems, from neurological and gastrointestinal to vision and more. Medications used to treat diabetes — whether insulin, a drug used to help with the absorption of insulin or one used to treat a complication — generate huge amounts of claims thanks to the cost of the drugs and the ongoing nature of treatment. And while more than half a billion people are living with diagnosed cases of diabetes worldwide,3  it is likely still underdiagnosed. 

It is noteworthy that obesity, as a comorbidity of diabetes and cardiovascular diseases, strongly influences prognosis and treatment outcomes of these conditions. Rising weight challenges across the globe, but especially in the U.S., continue to increase the burden of these diseases. Currently, obesity does not get enough attention in the context of claims costs, but with weight-reducing GLP1 drugs, this might soon change.

Finally, musculoskeletal/back issues continue to be a top source of claims. These conditions are inherent to sedentary lifestyles, stress, and are expensive to address, often requiring long-term treatment. 

Medical Conditions Global Overview
Regional Perspectives
  • North America

    The distinct nature of the U.S. and Canadian markets when it comes to employer- sponsored medical plans makes it difficult to identify similar medical conditions between the two countries. In the U.S., medical plans serve as the first and only source of any heath claim, whereas in Canada, medical plans are a complement to the public system and designed to supplement prescription drug coverage.

    Despite these differences, one thing is certain. The key driver of adverse claims in both countries is the result of rapidly increasing spend in treatments for chronic conditions, such as diabetes, and cardiovascular conditions driven by high blood pressure and high cholesterol. All these conditions are directly associated with poor nutrition and eating habits, as well as physical inactivity and overall obesity levels, which have been reported as top health risk factors in both countries. Mental health conditions, such as depression and anxiety, are frequently correlated with chronic conditions, adding to the cost and complexity.

    Musculoskeletal issues, including back and neck pain, tend to require long-term treatments — meaning they continue to be a heavy driver of claims in the region.

    Additionally, delayed cancer screenings during the COVID-19 pandemic have led to later-stage cancer diagnoses. The results of this are higher overall costs, on top of the already increased cost of more technologically advanced cancer treatments.

    The Conditions Driving the Rising Global Medical Trend Rate
  • Europe

    The top medical conditions in Europe have been consistent over the past several years. Cancer and cardiovascular disease are the common drivers of medical claims in most European countries. They are seen as the result of poor stress management and overall physical inactivity alongside an aging population. According to Eurostat, around 40 percent of all deaths in Europe are related to cardiovascular diseases, with a higher prevalence in Eastern Europe.

    Adding to these underlying risk factors is a lack of regular health screenings during the COVID-19 pandemic, which is expected to continue to push treatment costs higher, especially for cancer. According to the EU commission, 25 percent of all global cancer cases occur in Europe. Even before the pandemic, cancer was also a top driver for medical claims.

    Nonetheless, there are some noteworthy disparities between Western and Eastern Europe. In the UK, for instance, musculoskeletal issues have historically been the top condition, while in Eastern Europe, countries like Romania, Poland and Hungary continue to report gynecological/maternity conditions as an important driver of medical claims.

    Mental health has also recently gained attention in the UK and Western Europe. After the pandemic, an increasing number of countries reported mental health as a top condition, rising from 29 percent in 2019 to 55 percent in 2024; Ireland, Germany, Denmark, Norway and The Netherlands have all seen sizeable increases in the prevalence of this condition as well.

    The Conditions Driving the Rising Global Medical Trend Rate
  • Asia Pacific

    Cardiovascular conditions and cancer have consistently been the leading drivers of medical claims and death in the region. An aging population and the effect of urbanization and industrialization have gradually influenced more sedentary lifestyles and unhealthy eating habits. This has led to an increased prevalence of hypertension, which — combined with poor stress management following the COVID-19 pandemic — are the common underlying risk factors that contribute to the fast spread of these conditions and other non-communicable diseases like diabetes. Gastrointestinal and musculoskeletal conditions are also largely attributed to the risks above, with poor stress management being the most influential factor.

    Throughout the region there are important country differences. In India and Pakistan, gynecological/maternity conditions are the top claims drivers of medical plans, pushing this condition to a top five condition in the region for the first time in recent years. However, in China, Vietnam and Thailand, respiratory and lung disorders are growing, mostly as a result of tobacco smoking, viral illnesses and air pollution.

    The Conditions Driving the Rising Global Medical Trend Rate
  • Latin America

    The key drivers of medical claims in Latin America are chronic conditions. This is consistent with poor nutrition and a lack of physical activity resulting from increasing industrialization, coupled with the risk factors associated with chronic conditions like obesity. The availability of new treatments with material cost increases is also a factor.

    In the last five years, cancer has been the main medical condition driving claims and accounting for the overall cost increase in the region. Cardiovascular issues, especially in Brazil and Argentina, and diabetes, namely in Argentina and Chile, complete the top three drivers of medical claims. Cardiovascular issues have also risen to the top five list in several countries like Barbados, Bermuda, Colombia, Ecuador and Trinidad and Tobago. Hypertension, which increases the risk for cardiovascular disease, remains a top-five condition in the region (fourth overall) and is especially of concern in Peru, Ecuador and Colombia.

    The increase in obesity — especially among the younger population — is an emerging trend that is associated with the growing incidence of all these disorders. The change in dietary patterns due to economic growth and urbanization is seen as the main contributor for increased obesity risk.

    As the COVID-19 pandemic recedes, respiratory diseases have reduced in relevance as a driver of medical claims. Gastrointestinal conditions have taken their place over the last two years as a top-five medical condition driving adverse claims in the region. Gastrointestinal conditions are reported as a top driver of claims in Mexico, as well Honduras and El Salvador.

    The Conditions Driving the Rising Global Medical Trend Rate
  • Middle East and Africa

    High blood pressure and diabetes have consistently been the leading drivers of medical claims in this region. Poor nutrition, high blood glucose and a lack of health screening thanks to rapid urbanization and underdeveloped cities are underlying risks blamed for these conditions.

    The last five years have seen an incremental increase in the number of countries reporting high blood pressure as a top medical condition driving claims, moving from 59 percent in 2019 to 78 percent in 2024. South Africa, United Arab Emirates and Saudi Arabia have historically been among the countries where high blood pressure weighted heavily on the overall cost increase. However, this condition is now appearing across numerous locations in the region, mostly from the Middle East and North Africa — namely Egypt, Morocco, Qatar, Kuwait and Lebanon.

    The re-emergence of cardiovascular disease in the top five list is driven by its prevalence in more countries like the Congo, Israel, Jordan, Kenya, Lebanon and Senegal.

    The Conditions Driving the Rising Global Medical Trend Rate

Better Decisions 

Multiple Risks and Conditions Driving the Medical Trend Rate

Understanding the interaction between risk factors and conditions driving the global medical trend rate can be challenging. An obese person is at higher risk for hypertension, which places them at a higher risk for cardiovascular disease. The same can be said for someone with poor stress management. But poor stress management also makes them more susceptible to poor nutrition, which can lead to obesity. 

Another difficulty is that with multiple types of health systems (publicly funded vs. privately insured or somewhere in-between), it is difficult to make relevant comparisons across countries and regions. For example, the mental health infrastructure in Europe is more advanced than in Asia-Pacific. Regulators in other countries are pressuring insurers to cover mental health services like they do for physical health, but progress is slow. And in other regions, mental health issues may be treated less as a medical issue, and more as a social or community issue.

Quote icon

With intricate factors like disease burden, user behavior and healthcare systems at play, it’s important to remember that awareness of claims drivers is half the battle. Influencing them to keep costs reasonable is where the real work begins.

Dr. Amitabh Deka
Vice President, Health Transformation, Global
Be Proactive: Plan for Continued Rising Medical Costs Now 

With no end to the increases in the medical trend rate in sight, plan sponsors are looking for ways to keep costs under control. There are several strategies companies are using to mitigate these increases, which will be discussed in a future article. But the key for companies to meet this challenge in the future is to begin planning a long-term strategy now. This starts with knowing the impacts of different conditions and using data to make better cost decisions.

Aon's Thought Leaders
  • Rui Silva
    Vice President, Global Benefits
  • Kathryn Davis
    Vice President, Global Benefits
  • Dr. Amitabh Deka
    Vice President, Health Transformation, Global

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This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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