Healthcare in Bermuda - Argus Bermuda
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As healthcare costs continue to rise, it’s essential to understand the underlying factors driving these increases.
Explore the FAQs below to gain a deeper understanding of Bermuda’s healthcare landscape, the strategies Argus is employing to address these challenges, and their implications for you.
FAQs
The global medical trend rate reflects the annual increases in healthcare costs worldwide, driven by factors such as medical inflation, rising drug prices, and the prevalence of chronic diseases. Projected to reach 10.1% in 2024, this important metric reflects the sharpest rise in global medical costs since 2015, according to Aon’s annual Global Medical Trends Rate Report.
Key contributors include an ageing population, a high incidence of chronic diseases, external pressures such as supply chain disruptions — delays or interruptions in the production and delivery of medical supplies and drugs — and global economic downturns. Additionally, the escalating costs of specialty drugs and prescription medications further drive healthcare inflation.
As our population ages, the likelihood of developing multiple health conditions requiring medical care increases. By 2039, one in three Bermuda residents will be over 65, with a current life expectancy of 82 years. This demographic shift heightens demand for healthcare services, thereby driving up costs.
Health insurers typically allocate a minimum of 80% of premium to claims payments, which cover the costs of medical services, treatments, and prescription drugs. For larger organisations with 50 or more insured employees, this percentage can rise to 85% to ensure sufficient coverage of claims. Administrative costs, such as customer service and claims processing, consume about 10-12% of premiums. The remainder, which is usually around 3-5%, contributes to operating profit.
The increase in prescription drug costs is primarily driven by the high prices of specialty drugs and biologics — advanced medications made from living cells or organisms, including vaccines and gene therapies. These drugs, essential for treating complex conditions like cancer and autoimmune diseases, are expensive to produce. Additionally, supply chain issues and prescribing patterns contribute to rising costs, creating significant challenges for both healthcare providers and patients, as these expenses can substantially drive-up overall healthcare costs.
Step-Up Therapy promotes the use of affordable drugs before moving to more expensive treatments. This approach involves collaboration between the patients, pharmacies, and providers to ensure appropriate and cost-effective prescriptions.
Elective, non-emergency treatments and surgeries that could be performed locally are increasingly being referred overseas due to prolonged local wait times and limited resources. This shift results in higher costs for residents, as they incur additional travel and accommodation expenses, which in turn leads to higher healthcare claims. The reliance on overseas care can strain the overall healthcare system and contribute to rising costs for both insurers and patients.
Efforts focus on repatriating services back to Bermuda and leveraging access to new gateways. One Team Health, Inc. (OTH), our Toronto-based overseas care administrator, works closely with local teams to address cost containment and improve access to quality care.
The pandemic has increased the demand for healthcare services that were previously deferred, driving up costs and placing additional pressure on the healthcare system.
Argus has implemented several initiatives, including the acquisition of Island Health Services and Family Practice Group medical practices to align the interests of doctors, insurers, and patients. These practices offer no co-pay for GP and specialist services, for Argus insureds, along with programmes like the Diabetes Rewind Programme (DRP) to support patients with chronic conditions.
Argus is committed to preventive measures, benefits education, and the effective management of chronic conditions. Our objective is to reimagine healthcare infrastructure and promote efficient, collaborative care to achieve sustainable healthcare spending.
Discover how this strategic combination benefits you and the wider community. Learn more here
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