Medical costs payable for the Global Health Care segment reflects estimates of the ultimate cost of claims that have been incurred but not reported, those that have been reported but not yet paid (reported claims in process), and other medical care expenses and services payable that are primarily comprised of accruals for incentives and other amounts payable to health care professionals and facilities. See Note 7 to the Consolidated Financial Statements in the Company's 2016 Form 10-K for further information about the assumptions and estimates used to establish this liability.

Components of the Global Health Care medical costs payable balances as of March 31 were as follows:

	March 31,		March 31,
(In millions)	2017		2016
Incurred but not reported	$	2,088	$	1,960
Reported claims in process		542		506
Physician incentives and other medical care expenses and services payable		140		180
Global Health Care medical costs payable	$	2,770	$	2,646

	Three Months Ended
	March 31,		March 31,
(In millions)	2017		2016
Beginning balance	$	2,532	$	2,355
Less: Reinsurance and other amounts recoverable		275		243
Beginning balance, net		2,257		2,112
Incurred costs related to:
Current year		5,161		4,825
Prior years		(176)		(64)
Total incurred		4,985		4,761
Paid costs related to:
Current year		3,219		2,985
Prior years		1,509		1,449
Total paid		4,728		4,434
Ending balance, net		2,514		2,439
Add: Reinsurance and other amounts recoverable		256		207
Ending balance	$	2,770	$	2,646

Reinsurance and other amounts recoverable includes amounts due from reinsurers and policyholders to cover incurred but not reported and pending claims for certain business where the Company administers the plan benefits but the right of offset does not exist. See Note 8 for additional information on reinsurance.

For the periods ended March 31, incurred costs related to prior years were attributable to the following factors:

	Three Months Ended
(Dollars in millions)	March 31, 2017			March 31, 2016
		$	%⁽¹⁾			$	%⁽²⁾
Actual completion factors	$	78	0.4	%	$	51	0.3	%
Medical cost trend		98	0.5			28	0.1
Other⁽³⁾		-	-			(15)	(0.1)
Total favorable (unfavorable) variance	$	176	0.9	%	$	64	0.3	%

(1) Percentage of current year incurred costs as reported for the year ended December 31, 2016.
(2) Percentage of current year incurred costs as reported for the year ended December 31, 2015.
(3) Other amounts in 2016 related to increased medical costs in the Government segment resulting from additional provider risk sharing.

Incurred costs related to prior years in the table above, although adjusted through shareholders' net income, do not directly correspond to an increase or decrease to shareholders' net income. The primary reason for this difference is that decreases to prior year incurred costs pertaining to the portion of the liability established for moderately adverse conditions are not considered as impacting shareholders' net income if they are offset by increases in the current year provision for moderately adverse conditions.

The net impact of prior year development on shareholders' net income was a $61 million increase for the three months ended March 31, 2017 compared with a $14 million increase for the three months ended March 31, 2016. Favorable prior year development implies primarily lower than expected utilization of medical services.