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Expect to pay S$1,973 in medical costs per employee by 2030

Faced with a rapidly ageing population and increased medical cost, it is a must for employers in Singapore to relook at their healthcare strategies.

According to the latest report by Mercer together with Marsh & McLennan Companies’ Asia Pacific Risk Center (APRC), the segment of Singapore employees aged over 50 is projected to increase by 55%, and to represent 40% of the workforce by 2030.

This is likely to present a mounting financial burden for employers for employers as Mercer's analysis has shown that older employees tend to have a significantly higher rate of healthcare utilisation.

In fact, the report, titled “Aging Workforce: Cost and Productivity Challenges of Ill Health in Singapore”, pointed out that as employees age, they require more inpatient hospitalisation (from 2.4% in those aged 20-29, to 34% in those aged 60 or older), more general practitioner visits (from slightly under 60% in those aged 20-29, to almost 90% in those aged 60 and above), and more specialist visits (from 10% in 20-29 year-olds, to 53% in those 60 or older).

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This increase in demand and utilisation medical services will see the aging demographic contributing to 41% of the escalation in medical costs. To make things worse, together with inflation, this increase in demand and utilisation will result in a surge of overall costs.

The report highlighted that the aging workforce and medical cost inflation in Singapore are projected to drive up average medical costs per employee by 108% to S$1,973 per year in 2030, representing a mounting financial burden for employers.

What is worth noting is the top 10% of claimants attribute to 60% of all medical claim costs. This highlights the value of interventions for high-risk groups, such as health and wellness programs to reduce the incidence of disease, and screening for earlier detection of disease.

ALSO READ: Insurance premiums may go up by 85% in Singapore by 2030

Apart from increase in medical costs, societal aging is also likely to contribute to challenges such as productivity growth through increasing rates of absenteeism and presenteeism.

In Singapore, societal aging is estimated to drive the prevalence of chronic diseases such as cancer and diabetes by up to 200% by 2030.

Mercer ageing workforce infographic

Infographic and photos / Mercer

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