Insurance companies continue to struggle to keep costs down in the face of increasing medical costs.

On the upside, patients certainly can expect better treatments nowadays as medical advances have made increasingly sophisticated medical intervention available, but the newest treatments are often the most expensive, and drugs are increasing in cost.

And, despite major innovations, especially in the field of biotechnology, healthcare management worldwide is plagued by lumbering administrative systems, long waiting lists and overworked, underpaid staff according to a recent report by the Economist Intelligence Unit.

“This is a failure that costs taxpayers and patients dearly,” says Robin Bew, editorial director of the EIU report.

International health insurers need to take the complexity of diverse systems and costs into account when managing their client’s needs. So how do they approach this?

Managing costs
 Established international health insurer Bupa International focuses particularly on fulfilling the diverse expectations of their expat customers.

“The nature of the healthcare system in a particular country—the medical culture—has an effect on what customers expect,” says David Grint, commercial director for Bupa International.

“We manage this diversity by working with large network of hospitals worldwide and pre-arranging fee schedules. In this way we can manage our costs well and deliver the overall value for money which our customers expect.”

One top recommendation in the Economist Intelligence Unit report was for healthcare providers to strategically integrate their services, so as to better suit the needs of patients. The same can be applied to international healthcare plans.

More flexibility
For instance, responding to market need, in July 2009, Bupa launched a product which reflects this approach and which is the most drastic change they have made to their standard product offering in the last 20 years according to Commercial Director Grint.

“With our newly launched Bupa Worldwide Health Option, expats can choose the benefits they prefer over and above our core module. This gives them more flexibility and enables them to be more proactive should they wish to be,” he says.

“We are seeing a migration of customers from our existing product to the new product, which far in excess of what we estimated. Whether your costs will increase or not depends on what modules you buy and what product you are currently on. You can move to Bupa Worldwide Health Option by keeping your expenditure the same. We give customers the choice.”

The new plan covers everything from specialist treatment and prescribed medicines to medical equipment health screening, vaccinations, dental and optical treatment and worldwide evacuation for people who are unable to get the treatment they need in a local hospital.  

Grint observes that one of the psychological things around health, especially for expats is where you are treated not just how good the system is of the country you currently reside in.

“Expats might be happier being treated in their home country,” he says.

Recession
But are expats and companies taking out health insurance for their expats pulling back during global recession as budgets are cut and individuals review their expenditure?

“From an individual point of view, we haven’t seen any effect from the recession,” says Grint, who admits that Bupa has seen the impact of the recession on corporations, “who are shopping around more and looking more carefully at the range of benefits they offer their expats; who they want to cover and the options they want to give them."

A recent global survey from HR management consultancy Mercer, Leading Through Unprecedented Times, shows that most companies (94 percent) haven’t cut down on healthcare benefits. Instead, most increased employee contributions for health coverage and raised employee cost-sharing of the programme as health benefit utilisation often increases during a recession. The survey includes responses from more than 2,100 organisations with employees and operations in more than 90 countries.

 “When companies start shopping round we do pretty well. With regards to economies of scale we can be more flexible than others can. We give HR a bespoke plan to fit their needs,” says Grint.

 “The new product is primarily for individuals – they are generally going abroad to work or to retire – who are looking for a flexible and international health insurance plan.”