Global medical costs are projected to rise by double digits for the third consecutive year, according to a survey conducted by Willis Towers Watson (WTW), a global advisory and insurance brokerage firm. The 2025 WTW Global Medical Trends Survey anticipates a 10.4% increase in medical costs worldwide, with regional variations.
In North America, costs are expected to climb from 8.1% in 2024 to 8.7% in 2025. In the United States specifically, insurers forecast a 10.2% increase in 2025, up from this year's 9.3%. The Asia Pacific region is predicted to experience the highest acceleration at +12.3%, followed closely by the Middle East and Africa at +12.1%. Europe and Latin America will see relatively slower increases of +9.4% and +10.4%, respectively.
The survey identifies increased utilization of health services, rising pharmacy costs, and new medical technologies as primary drivers of these cost increases. A significant portion of insurers (67%) expects higher or significantly higher global demand for healthcare services over the next three years.
Linda Pham, WTW's global health and risk leader for Integrated & Global Solutions, commented on the findings: “With medical cost increases remaining at double-digit levels, employers will need to manage budget expectations and balance cost increases with data-driven business and health outcomes.” She emphasized that employers face ongoing challenges due to these unsustainable cost hikes.
Several factors contribute to the persistent high medical costs, according to WTW's statement on November 21 about the survey results. New medical technologies and pharmaceuticals have significantly driven up care costs globally. Public healthcare systems are struggling with high demand and limited resources, leading some patients to turn to private providers.
Additionally, there has been an increase in healthcare utilization over recent years, particularly in mental health services, which continues to add to overall care expenses.
Courtney Stubblefield, managing director of Health & Benefits at WTW, suggested that while some cost-influencing factors may be beyond control, employers can explore initiatives that help manage expenses while enhancing health benefits' value: “These include but are not limited to evaluating vendor and digital health solutions that expand wellbeing resources and reduce unnecessary utilization as well as reviewing their markets to ensure efficient sourcing of private healthcare coverages.”
