Overuse of care drives costs. The most significant factor contributing to rising medical costs related to provider and employee behavior is the overuse of care. While 65% of insurers are most concerned about providers driving up costs by overprescribing or recommending too many services, 55% also cite overuse of care due to insureds seeking inappropriate care.

Member coinsurance continues to be the most popular cost-sharing approach. Insurers once again identify member coinsurance as “typical” or “most typical” in all regions with the exception of Europe where insurance plans are more heavily integrated with government health programs. Using contracted networks of providers for all treatments is the most popular cost management method with 73% of insurers identifying it as most effective. Sixty percent of respondents cite the placing of limits on certain services as the second most effective tool for managing costs.

The cost burden of mental health conditions is expected to grow. Respondents rank cancer (80%), cardiovascular diseases (56%), and conditions affecting musculoskeletal and connective tissue (41%) as the top three conditions that currently affect medical costs. Gastrointestinal (40%) moved into the top three conditions causing the highest incidence of claims along with cancer (48%) and cardiovascular (36%); however, about four in 10 respondents predict mental health conditions will be among the three most common conditions affecting costs within the next 18 months (40%) and among the three most expensive in the next 18 months (39%).

Gaps in coverage persist for alcoholism, drugs and HIV/AIDS. Between 50% and 53% of group policies regardless of size include exclusions for alcoholism and drug use, while between 41% and 47% exclude on the basis of HIV/AIDs. Group policies for less than 50 employees are more likely to exclude preexisting conditions.

Claim data classification. Nearly half of insurers globally (48%) use the ICD-10 claim-coding system, while only 14% use a local coding system. This facilitates more consistent reporting of claim data and more accurate identification of core claim driver