Medical costs in the country are projected to rise by double digits for the third consecutive year due to increased use of health services, rising costs for hospitals and clinics, higher professional fees for medical practitioners, and a greater prevalence of diseases.

According to the WTW Global Medical Trends Survey, Philippine medical insurance costs are expected to increase by 18.3 percent this year, the second-highest growth rate among Asia Pacific (APAC) markets.

While slightly lower than the 2024 projection, WTW said this trend is expected to remain high in the long term.

WTW attributed the escalating costs to a rebound in claims frequency beyond pre-pandemic levels, coupled with a rise in the cost per claim due to higher expenses for medical services and procedures.

The survey also identified internal and external factors contributing to these rising costs. Internal drivers included medical practitioners recommending excessive services, such as over-prescription of medications and diagnostics.

External factors included the higher cost of new medical technologies and increased pressure on private healthcare providers due to overwhelmed public healthcare systems.

"Continued pressure is being placed on private healthcare providers in the Philippines," said Nel Badal, WTW Philippines head of health and benefits. "Although the rise in availability of telehealth and other virtual care offerings is expanding access to healthcare in the Philippines, it also contributes to increasing costs.”
“Coupled with the shortage of manpower in the healthcare sector in the country, the double-digit trend of medical cost increases remains and is expected to rise in the near future,” he added.

The health maintenance organization (HMO) industry in the Philippines has been significantly impacted, experiencing substantial losses in recent years due to increased claims and benefits payouts.

Ongoing negotiations between HMO associations and doctor groups regarding potential increases in professional fees further exacerbate the projected medical inflation for 2025.

The survey suggested that sustainable solutions and collaborative efforts are crucial to address this challenge.

Badal emphasized the need for a multifaceted approach: "Sustainable solutions and joint efforts from individuals, healthcare providers, and the government are needed to build a more resilient and cost-effective healthcare system to ensure that quality care remains accessible to all at an affordable price."

“Cost-sharing aimed at apportioning medical costs between insurers and members can also help to manage costs. This will help to minimize overuse and over-prescription of care," Badal said.