2025 Global Medical Trends Survey

The WTW Global Medical Trends Survey reveals that medical costs are projected to remain high at a global average rate of 10.4% in 2025, continuing the double-digit growth from 2024 and 2023, when it peaked at 10.7%.

Several major factors contribute to continued high medical costs

• A rise in new medical technologies and pharmaceuticals has greatly contributed to increased costs of care globally
• Public healthcare systems around the world have been overwhelmed due to high demand and limited available resources, leaving members to turn to and rely on private medical providers
• A surge in healthcare utilization since the COVID-19 pandemic continues to add to the overall cost of care

Looking at anticipated future trends

Over the next three years, 64% of insurers anticipate higher or significantly higher medical trends globally. This projection is higher in Asia Pacific, where over three-quarters (76%) of insurers predict higher or significantly higher trends for the region.

Furthermore, two-thirds (67%) of insurers anticipate higher or significantly higher global demand for healthcare services over the next three years. This is especially the case in Europe, where insurers overwhelmingly are predicting significant increases in demand for healthcare.

Key factors influencing medical trend rates

Increased utilization of mental health services is expected to lead to sizable increases in costs

A third (33%) of insurers expect substantial increases of 15% or more in costs per person for mental health services over the next three years. This is reported to be highest in Europe, where 44% of insurers expect such increases, followed by about a quarter of insurers in Asia Pacific (25%) and MEA (23%).

Globally, claims for mental and behavioral disorders continue to be the fastest-growing conditions by incidence over the previous 18 months, as reported by about half of insurers (48%). This is reported to be the highest in Europe, where 70% of insurers report it as the fastest-growing condition.

Pharmacy costs are expected to grow over the next three years

One in five (21%) insurers expects substantial increases of 15% or more in pharmacy costs, while almost half (46%) expect moderate growth (5% to 15% increase).

A prominent driver behind these cost increases is advancements in pharmaceuticals. Over half (55%) of insurers in MEA and the Americas cite advancements in pharmaceuticals as a significant factor driving medical costs.

Pressure to continually develop and improve medical technology and delivery infrastructure has contributed to an increase in healthcare costs

Globally, about two-thirds (69%) of insurers report the cost of new medical technologies as the top driver of medical costs. This is also reported as the top cost driver in both the Americas (88%) and Asia Pacific (73%). The demand to make healthcare cost-efficient and sustainable in the long term, while not compromising on patient care, is fueling medical technology development worldwide.

Continued pressure is being placed on private healthcare providers as public healthcare systems are overwhelmed

More than half (57%) of insurers report the decline in quality or funding of public healthcare as a top driver of increase in medical costs. Europe stands out as the region where the decline in public health systems is reported as the primary reason for cost increases, as cited by 75% of insurers. In the Americas, half of insurers (46%), and in Asia Pacific, 41% choose it as a top reason.

The impact of provider and employee behaviors on medical costs persists, leading to a higher medical trend

Globally, three-quarters (72%) of insurers report overuse or misuse of care due to practitioners recommending too many services as a top factor driving costs, which is an increase from 59% in 2023. This is the top behavioral driver of costs in all regions but the Americas.

The rise in availability of telehealth and other virtual care offerings is expanding access to healthcare but contributing to increasing costs

The biggest change made to medical portfolios in 2024 across all regions is the addition of telehealth and wellbeing services. Insurers continue to add telehealth services and features to their medical portfolios, with almost half of global insurers making these changes in 2024 — an increase from 41% in 2023. This is especially the case in MEA, with 58% of insurers reporting adding these benefits, and in Europe (50% of insurers).

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