Rising Medical Costs in India Affects Employers Healthcare Planning

Bangalore: Health care costs in India have risen dramatically over the last decade. India witnessed 22 percent growth in health care costs in 2006. It dipped to 12 percent in 2009 and has risen again in 2012. Average medical cost has increased by 9.8 percent and has risen by similar level in 2012, according to a study by professional services company Tower Watson.

The concept of health management is relatively new to India. Tower Watson’s 2012 India Health and Productivity survey finds that although companies are gradually embracing health and productivity strategies, there is still a long way to go. Many employers plan to make changes to their health care benefits offering over the next several years. “As employers try to maintain the balance between containing costs and offering competitive total reward packages, they are realizing that their future health care benefit choices are not quite as simple as paying or playing,” said Ron Fontanetta, senior health care consulting leader at Tower’s Watson, as quoted in towerswatson.com.

New medical technology causing overuse of care, practitioners recommending too many services, and providers profit motives, may be the major cause for rising medical costs in India. In some markets, these costs have become worse by fragmented systems, poor infrastructures and inefficiencies that drive up the use of care. In addition, lifestyle and rising health risks the world over including increased obesity rates and smoking related have accelerated higher costs for employers.