Healthcare costs projected to reach new high in 2025

Editor's Note

Healthcare costs are expected to rise between 7% and 8% in 2025, according to a report from PwC's Health Research Institute.

As detailed in a July 17 article from Fierce Healthcare, PwC projections for an 8% increase in the group market and 7.5% in the individual market would mark a 13-year high.

PwC analysts quoted in the article note that rising costs since the COVID-19 pandemic are reversing previous declines. Increases peaked at 11.9% in 2007 but fell to about 6% by 2020.

Factors driving this rise include inflationary pressures, increased prescription drug spending, and higher utilization for behavioral health services, Fierce Healthcare reports. Drug spending increases are due in part to new products, with PwC analysis calling out GLP-1 weight-loss drugs and the potential for new treatments for Alzheimer’s and Parkinson’s diseases.

According to the article, health plans are evolving their strategies to address rising costs more holistically, focusing on reducing over-utilization, improving operational efficiency, and enhancing medical management operations.