[Seeing a Doctor Becomes More Expensive] Uncovering the Reasons Behind Soaring Medical Costs and How to Cope

In Hong Kong, the cost of living, including clothing, food, housing, and transportation, is rising across the board, but the increase may not be as significant as medical inflation. Seeing a doctor in Hong Kong is becoming increasingly expensive, yet falling ill is inevitable. What is the root cause of the sharp rise in medical costs? How can we effectively address this to protect the health and wealth of ourselves and our families? Let 10Life help you find the answers. 

The term medical inflation refers to the continuous rise in the cost of medical services and medications. In simple terms, the cost of seeking medical care is becoming increasingly expensive, encompassing various areas such as outpatient services, medications, hospitalisation, surgeries, and rehabilitation treatments. In fact, medical inflation is a global phenomenon. According to the risk management consultancy WTW's 2024 Global Medical Trends Survey Report¹, global medical inflation is expected to decrease from 10.7% in 2023 to 9.9% this year. However, in Hong Kong, medical inflation shows no sign of peaking, with an expected rate of 8.36% this year, marking a continuous rise for the fourth consecutive year. 

Table 1: Personal Medical Insurance Policy Data

Data Source: Hong Kong Federation of Insurers

As shown in Table 1, according to the claims data released by the Hong Kong Federation of Insurers, the cost of staying in private hospitals and inpatient surgical fees are becoming increasingly expensive. Over the five years ending in 2021, the average billed amount for hospitalisation has risen by at least nearly 40%. Among these, the increase for semi-private rooms is the most striking, with a cumulative rise of over 62%, followed by standard wards with a 50% increase. Even private rooms, which saw the most restrained increase, have risen by nearly 40% cumulatively.

Additionally, the average billed amount for inpatient surgical fees, mostly charged by doctors, is also increasing. The increases for private rooms, semi-private rooms, and standard wards over the same period range from 22.4% to 51.6%, with standard wards and semi-private rooms seeing the highest increases, reaching between 40% and 50%.

As the population ages, the burden on public hospitals is increasing, leading many individuals to seek treatment at private hospitals. Additionally, the unhealthy lifestyle habits of urban dwellers, such as overeating, lack of exercise, insufficient sleep, excessive stress, and alcohol abuse, have contributed to a rising incidence of urban diseases like the "three highs"—high blood pressure, high cholesterol, and high blood lipids. This, in turn, is accompanied by issues such as insomnia, anxiety, and mental stress, increasing the likelihood of needing treatment.

Although medical technology is advancing rapidly, and innovative developments can improve patient survival rates, the costs of new medical technologies and medications are often exorbitant. Medical institutions must regularly review and adjust their fees, which directly contributes to medical inflation. 

Do not assume that medical inflation only affects patients; in reality, no one is immune. Medical inflation not only increases the financial burden on patients but also drives up health insurance premiums for the general public. Additionally, some individuals misuse corporate health insurance coverage, claiming compensation from insurance companies for non-essential medical or even cosmetic-related expenses, which indirectly contributes to the rise in health insurance premiums. As the saying goes, "the wool comes from the sheep"—if the operating costs of insurance companies increase, these costs will ultimately be passed on to consumers.

According to our statistics, in the 12 months leading up to June this year, a quarter of the health insurance plans on the market have increased their prices. Of these, nearly 70% of the products saw price hikes ranging from 5% to 10%, with some individual products experiencing increases of over 20%. The number of products with price increases rose by approximately 60% compared to the previous 12 months. However, while price increases may alleviate the pressure of rising operating costs for insurance companies, they can also reduce their competitiveness. Faced with this dilemma, different insurance companies adopt various strategies, such as employing different pricing approaches or proactively managing risk pools. Moreover, to curb the misuse of insurance, companies generally apply the principle of "reasonable and customary" when processing claims. Typically, insurance companies determine compensation amounts by referencing data from private hospitals, medical institutions, medical reports, and claim statistics. If the claimed amount exceeds the "reasonable and customary" medical expenses, the insurance company may not fully compensate, and the policyholder will need to cover the portion of expenses that exceeds the reasonable and customary fee level.

The main reasons for medical inflation, such as global population ageing and advancements in medical technology, are unlikely to reverse in the foreseeable future. Consequently, it can be inferred that medical expenses will only become increasingly expensive. If you wish to avoid an ever-growing medical burden, one solution is to purchase medical insurance, transferring the risk to the insurance company and avoiding bearing the risk alone.

Cigna自願醫保系列 provides insured individuals with an annual semi-private room coverage limit of up to HKD 30 million, along with no lifetime coverage limit, full reimbursement of hospitalisation medical expenses^#, allowing policyholders to face medical costs without fear. The plan also covers various cancer treatments, psychiatric care, emergency outpatient care for accidents, and emergency dental treatment for accidents. Additionally, it offers optional benefits to cover dialysis and post-discharge nursing expenses, which policyholders can add based on their personal needs. As a qualifying Voluntary Health Insurance Scheme product, each taxpayer can claim a tax deduction of up to HKD 8,000 per insured person.

Note:

1. WTW "2024 Global Medical Trends Survey Report"
2. Hong Kong Federation of Insurers Data

#Subject to annual coverage limits, designated ward levels, and coverage areas 

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.