【Why seeing a doctor is increasingly expensive】Uncover the reasons behind soaring healthcare costs and learn how to cope.

In Hong Kong, the cost of everything from food and clothing to housing and transport is rising, but the increases may still pale in comparison with medical inflation. Medical consultations in Hong Kong are becoming increasingly expensive, yet falling ill is unavoidable. What exactly is driving the sharp rise in healthcare costs? How can we respond effectively to safeguard our health and wealth, as well as that of our families? Let 10Life help you find the answers. 

Medical inflation refers to the continued rise in the costs of medical services and medicines. Put simply, the cost of medical care is becoming increasingly expensive, covering areas such as outpatient care, medicines, hospitalisation, surgery and rehabilitation. In fact, medical inflation is a global phenomenon. According to the 2024 Global Medical Trends Survey¹ by risk management consultancy WTW, global medical inflation is expected to fall from 10.7% in 2023 to 9.9% this year. However, medical inflation in Hong Kong does not yet appear to have peaked, and is expected to reach 8.36% this year, marking four consecutive years of increases. 

Table 1: Personal Medical Insurance Policy Data

Source: The Hong Kong Federation of Insurers

As shown in Table 1, according to claims data published by the Hong Kong Federation of Insurers, the cost of staying in a private hospital and inpatient surgery fees have been rising steadily. Over the five years to 2021, the average billed amount for hospital stays increased by nearly 40% at least, with semi-private rooms recording the most significant increase, at over 62%, followed by standard rooms, which rose by 50%. Even private rooms, which saw the smallest increase, recorded a cumulative rise of nearly 40%.

In addition, the average billed amounts for inpatient surgery fees, most of which are charged by doctors, have also been rising. Over the same period, the increases for private, semi-private and standard rooms ranged from 22.4% to 51.6%, with standard and semi-private rooms recording the largest increases of 40% to 50%.

As the population ages, the burden on public hospitals is becoming increasingly heavy. Many people are turning to private hospitals for medical treatment. In addition, unhealthy urban lifestyles, such as overeating, lack of exercise, insufficient sleep, excessive stress and alcohol abuse, have led to an increase in the incidence of urban diseases such as the “three highs”: high blood pressure, high cholesterol and hyperlipidaemia. These are also accompanied by insomnia, anxiety and nervous tension, resulting in a higher likelihood of requiring treatment.

Although medical technology is advancing rapidly and innovative developments can improve patients’ survival rates, the costs of new medical technologies and medicines are also relatively high. Medical institutions therefore need to review and adjust their charges regularly, directly contributing to medical inflation. 

Do not assume that medical inflation only affects patients; in reality, no one is immune. In addition to increasing patients’ financial burden, medical inflation also drives up health insurance premiums for the general public. Furthermore, some people abuse the coverage provided by their employer’s health insurance, making claims for non-medically necessary, cosmetic-related procedures, which indirectly pushes up health insurance premiums. As the saying goes, “the wool comes from the sheep”; if insurers’ operating costs rise, these costs will ultimately be passed on to consumers.

According to our statistics, in the 12 months to June this year, one-quarter of the health insurance plans on the market increased their premiums. Nearly 70% of these products saw increases of between 5% and 10%, while the increase for some individual products exceeded 20%. The number of products subject to premium increases rose by approximately 60% compared with the previous 12 months. However, although premium increases alleviate the pressure caused by rising operating costs for insurers, they may also reduce their competitiveness. Faced with this dilemma, different insurers have adopted different approaches, such as using various pricing strategies and actively managing their risk pools. In addition, to reduce cases of insurance abuse, insurers generally apply the principle of “reasonable and customary” charges when handling claims. In general, insurers refer to information such as charges from private hospitals and medical institutions, medical reports and claims data to determine the amount payable. If the claimed amount exceeds the “reasonable and customary” medical expenses, the insurer may not provide full reimbursement, and the insured will have to pay any expenses exceeding the reasonable and customary charge level themselves.  

The ageing global population and advances in medical technology are among the main causes of medical inflation, and these factors are unlikely to reverse in the foreseeable future. It follows that medical expenses will only become increasingly expensive in the future. If you do not want the burden of medical expenses to become increasingly heavy, one option is to take out medical insurance and transfer the risk to an insurance company, avoiding having to bear the risk alone.

Cigna Voluntary Health Insurance Series provides insured persons with an annual semi-private room coverage limit of up to HK$30 million, with no lifetime coverage limit, and reimburses hospital medical expenses in full^#, allowing policyholders to face medical expenses without worry. The plan also covers various cancer treatments, as well as psychiatric treatment, accident and emergency outpatient care, and dental treatment for accidental injuries. Additional coverage is also available for items such as dialysis and post-discharge nursing expenses, which policyholders can purchase according to their individual needs. As this is a qualifying Voluntary Health Insurance product, each taxpayer may receive a tax deduction of up to HK$8,000 for each insured person.

Note:

1. WTW “2024 Global Medical Trends Survey Report”
2. Hong Kong Federation of Insurers data

#Subject to the annual benefit limit, designated ward class and covered location 

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.