In the fabric of our daily lives, a silent struggle weaves its way through our families and organisations—a struggle marked by the soaring costs of healthcare.
It is a journey that compels us to address a poignant question: How many among us have found ourselves unexpectedly added to WhatsApp groups, not for casual conversation, but as a collective response to the overwhelming burden of high hospital bills?
Driven by the rise of global healthcare costs, more and more people are relying on online communities to navigate the financial burden of medical costs.
Various factors contribute to the escalation of healthcare costs, and during periods characterised by persistent inflation, such as the post-Covid era, these costs have surged dramatically. For instance, expenses for consultations, specific procedures like maternity care, and certain medications have, in some cases, doubled.
A 2021 study by the Association of Kenya Insurers revealed that Kenyans are burdened by the exorbitant cost of hospitalisation, which they perceive as the most significant daily risk to their well-being.
Understanding the drivers for the increase in healthcare costs will therefore assist families and organisations in managing expenditures on health insurance. The key driver of healthcare costs is inflation driven by the increase in the input costs for healthcare such as the increase in drug costs, diagnostic equipment and reagents, consultations and general cost of doing business.
Specifically, drugs, which form a significant proportion of treatment costs, often over forty per cent, are further impacted by foreign exchange price depreciation. This is because the majority of drugs are imported and thus subject to these foreign exchange movements.
Further, the prevalence of chronic illnesses driven by sedentary lifestyles, and the increasing ageing population drive up costs. Chronic illnesses such as hypertension, diabetes and arthritis require long-term management and where not properly managed may lead to complications requiring hospitalisation.
With these rising costs of healthcare, health insurance premiums consequently increase annually to enable insurers to remain sustainable and work towards returning a profit. As users, individuals and organisations can make certain adjustments to counter the rise in healthcare costs and by extension the rising cost of health insurance premiums.
The first step is to assess the scope of the medical coverage required, ensuring it aligns with your individual or organisational requirements. For instance, a younger demographic may not require extensive coverage for chronic conditions.
Additionally, examine the panel list outlined in your policy and select one that fits your budget. Opting for a more limited panel, as opposed to a broader array of service providers, is one way to achieve this.
Moreover, considering cost-sharing arrangements like co-pays and deductibles, although not common in the Kenyan insurance landscape, can effectively reduce health insurance premiums and influence the utilisation patterns of coverage, particularly for organisations.
Secondly utilising virtual healthcare access options such as telehealth and telemedicine, and more so as the first line of usage before using mainstream health facilities for minor ailments have been seen to reduce costs significantly. Drug delivery programmes, especially for refills for long-term conditions, are critical in maintaining health expenses within the budget.
Third, embracing preventative healthcare such as annual medical check-ups will assist in alleviating potentially huge future health expenditures. Serious health conditions can be diagnosed early enabling timely interventions which increase the chances of successful treatments as well as guarantee lower costs of treatment.
Wellness programmes centred around fitness, stress management and lifestyle changes are known to help improve overall well-being. Investing in and utilising gym memberships, fitness trackers, home exercise equipment as well as workout groups can enhance fitness and reduce incidences of lifestyle diseases, help prevent certain chronic health conditions and reduce the utilisation of healthcare services.
While the rising cost of healthcare and health insurance presents challenges for individuals and organisations, there are proactive steps that can be taken to effectively manage rising costs and premium increases.
By reviewing the product designs, which includes re-negotiating with your health insurer for a review of the coverage scope including the network of service providers, and cost-sharing arrangements such as co-pays and deductibles, you immediately manage the premium cost.
Further, utilising emerging platforms such as virtual telehealth and drug delivery services, preventative healthcare and actively pursuing well-thought-out wellness programmes will lower incidences and severity of illnesses and support longer-term stability of healthcare costs and insurance premiums.
The writer is a Principal Officer, AAR Insurance
