As healthcare costs soar globally, organizations face mounting pressure to strike a balance between supporting employee health and managing escalating expenses. The latest figures show that global healthcare expenditure reached $9.8 trillion in 2021[1], and OECD projections suggest it could consume 11.8% of GDP across OECD countries by 2040[2]. For employers, these trends are driving unsustainable increases in private healthcare costs, further exacerbated by overstretched public healthcare systems.
So, how can transformative artificial intelligence (AI) address these challenges?
The challenge: Rising expectations and unsustainable costs
Public healthcare systems, especially in regions like Europe, are struggling to meet demand. According to our 2024 Global Benefits Attitude Survey, 34% of employees in EMEA face significant delays in accessing medical care, and 44% worry about even longer waiting times in the future. As a result, employees increasingly turn to their employers for healthcare support.
Not surprisingly, private healthcare costs are climbing at an unsustainable rate. Our 2025 Global Medical Trends Survey research highlights that medical inflation in EMEA was at 10.1% and is projected to be 9.4% for 2025. Employers also face competing priorities for compensation budgets. They need to address cost-of-living challenges, compliance with recent increases in minimum wage and national insurance contributions and ensuring retirement adequacy.
The solution? A shift in healthcare strategies — moving from reactive to proactive, and from generic to personalized. This is where AI offers unparalleled opportunities.
AI: A foundation for employees to engage with their health
AI is revolutionizing healthcare by enabling more personalized, efficient and predictive solutions. We explored this topic in a recent conversation with Dan Cobley, a digital health investor and former MD of Google U.K. & Ireland. Over the last couple of years, he’s witnessed a dramatic shift in how businesses use AI.
Dan observes: “Of the startups I see today, across all sectors including benefits and healthcare, I'd say 90%+ have AI as a core component of what they’re offering, and it’s for one of two reasons. Either AI dramatically improves the efficiency of what they already do, or AI allows them to do something that was impossible to do before.”
For employers, integrating AI into health benefits strategies can significantly improve the employee experience by offering tailored, empathetic support. AI-powered digital platforms provide predictive health insights and personalized care pathways, ensuring employees feel understood and supported. This not only fosters engagement but also improves health outcomes over time.
AI: A tool for managing healthcare costs
Governments and private sectors alike are turning to AI to tackle healthcare costs. We’ve seen recent announcements from governments in countries like Germany and Denmark outlining their digital health strategies and the U.K. government’s partnership with Microsoft aims to transform public healthcare delivery through AI. Similarly, AI’s potential in private healthcare includes:
- Accelerated drug development: Using ‘digital twins’ (virtual copies of a physical person that can be used in healthcare to model disease) to simulate and personalize drug testing.
- Hybrid healthcare: Integrating wearable technology with in-clinic treatments to create a seamless care experience.
- Predictive health management: Shifting from reactive treatment to proactive, data-driven health strategies, reducing long-term costs.
For employers, these developments present a pathway to sustainable healthcare delivery. By leveraging AI, organizations can address health risks earlier, reducing the financial burden of chronic conditions and expensive treatments.
Actionable steps for employers
We’re still in the early stages of the AI revolution; over the long term, the effects are expected to transform the world we live in. Without AI and other technical innovations, employers and the state will face a prohibitively expensive healthcare bill. It’s vital to embrace AI’s limitless possibilities, to help people live longer and healthier lives.
It's important to focus on transformational benefits rather than just the latest trends. While new and shiny healthcare solutions may attract attention, the priority should be on benefits that engage the population and positively impact health risk management. The goal is to have a suite of benefits that truly make a difference in healthcare delivery over time. And for organizations to remain competitive.
Here’s five steps employers should consider now:
