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Tackling Medical Inflation: Opportunities in GBA Cross-Border Healthcare

Updated: 6 days ago

Hong Kong’s healthcare system, characterized by its dual public-private structure, faces intense pressure from rapidly rising medical costs, with premiums for group medical insurance soaring 55% from 2021 to 2024, according to the Hong Kong Employee Medical Insurance Index by PolyU CPCE and GUM. With medical inflation projected at 9.8% for 2025, employers and insurers are seeking innovative solutions.


The Greater Bay Area (GBA) offers a compelling opportunity through healthcare integration, leveraging lower-cost, high-quality mainland medical services. At EverBright Actuarial Consulting Limited, we explore the challenges of medical inflation in Hong Kong, the rise of GBA healthcare integration, and strategies to optimize employee benefits, enriched with data and real-world examples.


This article focuses on Hong Kong’s group medical insurance market and premium control. If you would like to learn more about the basic elements and key considerations for choosing Hong Kong group medical insurance, please refer to: Group Medical Insurance: Definition, Coverage, Benefits, Costs, Claims.


The Challenge of Medical Inflation in Hong Kong


Hong Kong’s medical costs have surged 1.9 times over the past decade, far outpacing the general inflation rate of 1.8% projected for 2025, per the Hong Kong Census and Statistics Department. In 2023, medical inflation peaked at 10.7%, a 15-year high, driven by a post-pandemic surge in healthcare utilization and costly treatments for cancer and cardiovascular diseases.


medical inflation in APAC
medical inflation in APAC

For a mid-sized firm with 100 employees, group medical premiums rose from HKD 1.2 million in 2021 to HKD 1.8 million in 2024. The aging population, projected to reach 2.52 million (31% of total) by 2039, intensifies demand for chronic disease management, further escalating costs.


Outpatient services rose 15% (HKD 500–1,500), medications by 15% (HKD 500–5,000/month for chronic diseases), preventive care by 16% (HKD 2,000–10,000), and surgical costs by 12–15% (HKD 50,000–100,000).


Public healthcare, managed by the Hospital Authority, faces long wait times—up to several years for specialist services—forcing reliance on expensive private care or cross-border alternatives in the GBA.

Year

Medical Inflation (%)

General Inflation (CPI, %)

Key Drivers

2020

8.3

0.3

Delayed non-emergency services

2021

8.0

1.6

Reduced utilization due to pandemic

2022

8.8

1.9

Post-pandemic demand rebound

2023

10.7

2.1

Surge in utilization, 15-year high

2024

10.3

1.73

High-cost treatments, global average 10.4%

2025*

9.8

1.8

Aging population, chronic disease demand

*Projected data.


GBA Healthcare Integration: A Cost-Effective Solution


The GBA’s healthcare integration, driven by the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, offers a solution to Hong Kong’s cost pressures.


Key policies include the Elderly Healthcare Voucher GBA Pilot Scheme, enabling seniors to use vouchers at 12 GBA medical institutions as of May 2025, and the Support Scheme for Hospital Authority Patients, providing access to mainland public hospitals.


Cross-border electronic medical records and mainland social insurance enrollment (e.g., Shenzhen’s Tier-2 plan at 800 RMB/year with 70% reimbursement) enhance care continuity and affordability.


The GBA’s 75 Grade 3A hospitals, including the University of Hong Kong-Shenzhen Hospital (HKU-SZH) and the First Affiliated Hospital of Guangzhou Medical University, offer international-standard care at 10–50% of Hong Kong’s private costs.


For example, hospitalization in Shenzhen costs 330–1,100 HKD/day versus 3,000–23,000 HKD/day in Hong Kong, and dental cleanings in Guangzhou cost 110–330 HKD compared to 500–1,500 HKD in Hong Kong.

Medical Service

Hong Kong Cost (HKD)

GBA Cost (HKD)

GBA VS HK Cost

General Consultation

Private: 500–1,500

22–660

10–30%

Hospitalization (Daily)

Private: 600–23,000

330–5,500

20–50%

Appendectomy

Private: 50,000–100,000

11,000–55,000

20–50%

Dental Cleaning

Private: 500–1,500

110–330

20–30%

Source: Hong Kong SAR government, mainland hospital data, 2023–2025.


Real-World Examples of Cross Border Healthcare


Globally, Singapore’s model of partnering with Malaysian hospitals cut costs by 25% (Aon, 2023), inspiring Hong Kong insurers like Prudential to offer direct billing at Shenzhen’s United Family Hospital. In the US, employers using cross-state telehealth reduced outpatient costs by 12% (Deloitte, 2024), suggesting Hong Kong adopt similar digital solutions for GBA care.


The Global Medical Trends Survey 2025 notes that 60% of Asia Pacific insurers are integrating cross-border care to offset 12.3% regional medical inflation. In Australia, 45% of firms used wellness programs tied to lower-cost providers, cutting claims by 9%.


Challenges and Strategic Opportunities


Despite the GBA’s potential, challenges include differing medical cultures, complex claims processes, and unresolved issues in cross-border medical record sharing. For example, a Hong Kong resident seeking care in Shenzhen faced delays due to manual reimbursement processes in 2024. Insurers must streamline claims and ensure data privacy. Singapore’s standardized cross-border protocols, reducing administrative costs by 8%, offer a model for Hong Kong.





Partner with EverBright for GBA Healthcare Solutions


Navigating Hong Kong’s medical inflation and GBA opportunities requires expertise. EverBright Actuarial Consulting Limited, with our actuarial consulting and licensed brokerage services, helps employers and insurers design cost-effective, cross-border group medical plans.


Our Hong Kong subsidiary, holding Life and General Insurance broker licenses, offers tailored solutions, integrating GBA hospital access, telemedicine, and mental health support to manage costs and enhance employee well-being.


Since 2014, we’ve empowered businesses to create competitive benefits packages. Contact us at info@ebactuary.com or via our online form to discover how EverBright can optimize your insurance strategy, leveraging GBA integration to deliver value and foster a healthier workforce.

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