Medical inflation rate 'moving into stable trend' in Singapore: report
Healthcare benefit costs in Singapore are projected to hit another double-digit increase in 2025, but there are signs indicating potential stabilisation in the state's medical inflation rate despite surging forecasts elsewhere.
WTW's 2025 Global Medical Trends Report estimates Singapore's projected healthcare benefit costs to increase by 12.0% next year, similar to 2024 and only slightly lower than the 13.7% in 2023.
"Singapore's medical inflation rate seems to be moving into a stable trend in 2025," said Audrey Tan, Head of Health & Benefits, Southeast Asia and Singapore at WTW, in a statement.
With the Singaporean government already investing in improving its population's health, Tan stressed that employers should also focus on workforce wellbeing, with a particular emphasis on preventive care.
"The focus is to build a future-ready workforce that is ready for challenges ahead, especially to cater for the varying demographics in today's workplace," Tan said.
Singapore's projected healthcare benefit cost increases are higher than the global projection of 10.4%, but slightly lower than the 12.3% forecasted for the Asia-Pacific region.
APAC's projected benefit cost increase, which is the highest across the world, continues a three-year increasing trend for the region. It is up from the 11.9% in 2024, and the 10.9% in 2023, according to the report.
Insurers said healthcare costs are strongly driven by medical practitioners recommending too many services (79%), including overprescription of both medications and diagnostics.
External factors that insurers cited include:
Royston Tan, Head of Health & Benefits, Asia Pacific, WTW, advised employers to prepare for further increases in medical costs in the future.
"The seemingly never-ending rise in costs poses a constant challenge for employers to manage their medical programmes in a sustainable manner," Tan said. "Employers will need to brace themselves for higher expenses without compromising care for their employees."
According to Tan, there are still some key initiatives that employers can implement to help control costs while boosting the value of their health benefits.
"These include but are not limited to promoting preventive care, evaluating vendor solutions and continuing to expand wellbeing offerings," Tan said.
"The objective is to provide employees more resources to understand the importance of taking care of their own health, supported by quality patient-centric care at an affordable price."
