Healthcare costs aren’t just a budget line; they’re a strategic lever. When medical spend rises faster than revenue, margins tighten, cash for growth shrinks, and benefits become harder to enhance. That’s why medical trend matters so much right now. Industry analysts project global medical costs will rise about 10.4% in 2025 (1), with the United States just under that projection at 10.2% in the third straight year of elevated increases. And nearly 2 out of 3 insurers (2) expect trend to remain higher over the next three years.

The drivers are familiar: pricier new technologies and drugs, continued pressure on public systems (pushing volume into private plans), and higher utilization—especially for mental health—since the pandemic.

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Against that backdrop, our recent three-year factor-adjusted PEPM trend of 5.1% (3) comes in below widely cited industry benchmarks (e.g., 7.0% reported by Aon (4); and WTW (5) at 8.7%). While individual client results vary, our overall book continues to run below market, and this can have a major impact on employers.

Why controlling medical trend is now a competitive advantage

Keeping trend in check isn’t just “nice to have.” It directly improves:
  • Profitability and cash flow. Every point you shave off medical trend compounds year over year, freeing dollars to invest in operations, innovation, and growth.
  • Total rewards strength. Lower underlying costs give you room to enhance benefits (or avoid cost-shifting), which helps you differentiate in offers and negotiations.
  • Recruiting and retention. In a tight labor market, richer or more stable benefits—along with clear navigation and member support—boost acceptance rates and reduce churn.
  • Culture and productivity. When employees can actually use their benefits confidently, they get care earlier, recover faster, and miss fewer days—reducing downstream high-cost claims.

How we beat trend (and keep pushing lower)

A major reason we run below trend is our claims processing excellence—a foundation we’ve invested in for years:
  • ClaimsXten® clinical edits to catch coding and bundling issues up front
  • Waste & Abuse controls to flag unnecessary services and patterns
  • Complex Claims review to resolve high-dollar, high-variance cases
For example, in our last cycle, we reviewed more than 1.5 million claims for waste and abuse, and saved our clients nearly $15 million dollars, resulting in average savings of more than $3,000 per claim when savings were identified. Savings came from finding documentation errors, duplicate claims, inaccurate billing codes, recommended denials, and services not separately payable or lacking valid orders. These aren’t one-time wins; they’re systematic controls that keep working as the market.

What employers and brokers can do right now

Some cost drivers are outside anyone’s control (e.g., the rising cost of new medical technologies and pharmacy pressure), but several levers consistently move the needle.
  1. Promote preventive care (and measure it). Drive screenings, vaccinations, and early detection outreach. Earlier care is usually better care—and less expensive.
  2. Target chronic conditions with proven programs. Focus on diabetes, musculoskeletal, cardiometabolic, and rising-risk cohorts. Look for vendors with outcomes you can audit.
  3. Optimize plan design for value.
    • Align networks to high-quality, lower-cost providers and sites of care.
    • Tighten utilization review and pharmacy management where trend is hottest.
    • Help members stay in-network to keep costs down.
  4. Make the experience effortless. Give members clear guidance, digital tools, and live help so they choose in-network, appropriate settings and avoid unnecessary services.

The bottom line

Trend pressure isn’t going away; if anything, the industry expects it to persist in the medium term. But employers that pair rigorous claims controls with smart plan design and a member-first experience can keep costs below trend—and convert those savings into a competitive edge: stronger margins today and more attractive benefits that win talent tomorrow.
 
1. Willis Towers Watson, “2025 Global Medical Trends Survey report.” (2025) Retrieved from: https://www.wtwco.com/en-us/insights/2024/10/2025-global-medical-trends-survey
2. Willis Towers Watson, “2025 Global Medical Trends Survey report.” (2025) Retrieved from: https://www.wtwco.com/en-us/insights/2024/10/2025-global-medical-trends-survey
3. Internal data. Our 5.1% figure is a factor-adjusted PEPM (demographic and geographic), excludes clients with reference-based pricing. Individual client results may vary.
4. Aon, “The Global Medical Trend Report 2026.” (2025). Retrieved from: https://www.aon.com/en/insights/reports/the-global-medical-trend-rates-report
5. https://www.wtwco.com/en-us/insights/2024/10/2025-global-medical-trends-survey