Global medical costs to increase by double digits for third straight year, survey finds

Author(s):

Todd Shryock

Key Takeaways

Global medical costs are expected to rise by 10.4% in 2025, driven by increased healthcare utilization and new medical technologies.
North America and Asia-Pacific will see significant cost increases, while Europe and Latin America will experience slower growth.
64% of insurers anticipate high or increasing global medical costs over the next three years, with strong demand for healthcare services.
Rising pharmacy costs and reliance on private providers due to overburdened public systems contribute to the sustained increase in healthcare costs.

Rising utilization and pharmacy costs, along with new technologies, blamed for the rise

Health care costs on the rise: © darren415 - stock.adobe.com

For the third consecutive year, global medical costs are expected to rise by double-digit percentages, with no significant relief in sight, according to the 2025 Global Medical Trends Survey conducted by WTW, a global advisory company.

The survey, which gathered responses from 348 leading health insurers across 75 countries, projects a 10.4% increase in global medical costs in 2025, matching the rate seen this year. The primary drivers of these increases include rising health care utilization, escalating pharmacy costs, and the introduction of new medical technologies.

Regional variations in cost increases

The growth in medical costs will vary across regions. In North America, medical expenses are projected to climb from 8.1% in 2024 to 8.7% in 2025. In the United States specifically, insurers forecast a 10.2% increase next year, up from 9.3% in 2024. Meanwhile, costs are expected to accelerate in Asia-Pacific, the Middle East, and Africa, while Europe and Latin America are predicted to see slower growth rates.

Despite some regions showing signs of cooling trends, the overall outlook remains grim. Over the next three years, 64% of insurers expect medical cost trends to stay high or significantly increase globally. Additionally, demand for healthcare services shows no signs of waning, with 67% of insurers anticipating higher global demand through 2027.

Several factors are fueling the sustained rise in health care costs. Insurers point to the growing adoption of new medical technologies and pharmaceuticals as a major driver, alongside increasing healthcare utilization, particularly in mental health services. Overburdened public health care systems have also led more people to rely on private providers, further contributing to cost increases.

The 2025 Global Medical Trends Survey was conducted from June to August 2024. It incorporated input from insurers and WTW brokers across 90 countries, representing a comprehensive look at global health care cost trends.