For Employers: Understanding medical inflation and how it affects the cost of healthcare

Comprehensive health insurance is an important and valuable benefit for employees, providing security and peace of mind, but it can also come at a great expense. Over the years, the cost of delivering healthcare has risen steadily, in part due to factors that include the emergence of new life-changing treatments and technologies, the growing prevalence of chronic diseases, the impact of supply and demand, and changes in our population demographics.

It’s helpful to understand and recognise the reasons behind these trends and explore ways we can support each other and manage the healthcare inflation curve.


Global Trend Rate

According to a recent Aon report, the global average medical trend rate for 2023 is expected to be 9.2% — up from 7.4% in 2022 - the highest we’ve seen since 2015.

While there are several factors driving increased healthcare costs, the top medical conditions that have consistently contributed to these increases include: cardiovascular diseases, cancer, hypertension, diabetes, obesity, and high blood pressure — and all are prevalent in Bermuda.

Demographics Trends

The cost of insurance premiums is influenced by demographic factors such as an individual’s age and gender. Premium rates are calculated based on the number of members of the employee population who fall within the same category.

As Bermuda’s working population ages, there is an increased risk for health events or conditions that will require high-cost medical care. This is compounded by the fact that there is a lack of younger, healthier individuals entering the workforce to offset, or spread, this risk. In small communities like Bermuda, the effects of these demographic trends can be more pronounced, leading to increased insurance use and greater healthcare costs.

Healthcare Usage

Since the global pandemic, healthcare usage has undergone a dramatic transformation that has led to rising healthcare costs in Bermuda. Here are some factors driving these changes:

  • An aging population, resulting in a higher demand for care services
  • Care that was delayed during the pandemic (dentist appointments, mammograms, etc.)
  • Lifestyle illnesses, such as diabetes and high blood pressure, are continuing to rise, requiring more care, more often, and longer term
  • An increased demand for mental health and substance abuse resources, with a significant increase in adult inpatient admissions for mental health services
  • Expanded use of virtual healthcare
  • New drugs and technologies on the market
  • Scarcity in the medical supply chain and human resources for health (e.g., nurses, medical technologists, etc.)

Overseas Medical Inflation

We are also seeing a trend in increased overseas healthcare spending, which has made a significant impact on this year’s overall healthcare inflation numbers at renewal.

As emerging therapies like stem cell transplants and biologics, are being successfully deployed overseas to treat a variety of diseases, it’s clear that we are living in a truly remarkable time of innovation in medical care. However, breakthroughs that have a significant impact on quality of life often come at a higher cost.

And while overseas care plays a critical role in Bermuda’s healthcare ecosystem, we are observing an increase in overseas treatment for services previously categorised as “elective” and performed locally at lower costs. In some cases, these elective services are no longer available locally, or members are experiencing longer wait times, which can impact their quality of life. We’re working to incentivise and repatriate local healthcare services, where possible, while balancing the needs and desires of our members.

Supporting Our Clients First

It's important to note that as these trends continue, our goal at Argus remains the same: to support the ongoing needs of our clients with a focus on prevention and providing access to high-quality, affordable healthcare.

Partners in Care

We firmly believe that by focusing on the overall health of your employees — not just addressing illnesses as they happen — we can effectively promote better patient outcomes. Employee well-being is a priority for all of us, and that means providing a high standard of care while saving on costs where possible.

Success can only be achieved by working together. Argus has developed a host of programmes outlined below, and we need your help to connect members who can benefit the most from these tools and support services.

Resources we offer:

  • Thrive. provides educational health and wellness activities including seminars, wellness challenges and chronic disease management, and preventative care programmes that appeal to a variety of lifestyles to support meaningful and sustainable well-being.
  • One Team Health (OTH), our dedicated team of tenured medical case management experts, work with members, insurers, and providers in tandem to deliver first-in-class overseas care. OTH contracts directly with providers to ensure access while also containing costs.
  • The Diabetes Rewind Programme, our newest initiative, uses proven methods for supporting weight loss, reducing medications, and achieving diabetes remission for some type 2 diabetics. So far, 39 patients have enrolled in our programme achieving an average decrease in HbA1c of 1 point, which is statistically significant.

To meet the challenges of evolving healthcare conditions, we offer benefits such as:

  • The Student Mental Health Hotline to support students overseas.
  • A new specialty network for non-solid organ transplants that provides world-class care while reducing costs for bone marrow, stem cell and emerging CAR-T therapies.
  • Greater and more affordable access to specialty prescription drugs (biologics), covering up to 100% for Tier 1 specialty prescription drugs if on the approved list and pre-certified by Argus.
  • Access to our 24/7 Telenurse Hotline. Members can call 441-298-0430 with non-urgent health-related issues, and a registered nurse will answer questions related to acute medical symptoms, mental health, and appropriate level of care for their condition.
  • Specialist consultation at Island Health Services and Family Practice Group that covers 100% of billed charges.

Learn More and Talk to Us

Visit our learning resource centre to understand more about healthcare inflation and its impacts. You can also give us a call Monday through Friday, between 8:30 a.m. and 5:00 p.m., at 441-298-0888, or contact us online.

The information provided in this article is for general informational purposes only and is not intended as a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or other qualified health care provider with any questions you may have regarding a medical condition or treatment.

DISCLAIMER: The content in this article is for informational purposes only and is not intended to be a substitute for professional medical advice, diagnosis or treatment.