Issue link: https://beckershealthcare.uberflip.com/i/1545864
23 23 HEALTHCARE NEWS ADVERTISINGINDEX Note: Ad page number(s) given in parentheses Arthrex, Inc. arthrex.com (pg. 24) Commure. commure.com (pgs. 2-3) Holland & Knight LLP. hklaw.com (pg. 8) MedVanta. medvanta.com / (301) 291-5095 (pg. 17) Healthcare faces 'watershed moment' with costs jumping 9% in 2027: 7 things to know By Alan Condon C ommercial healthcare costs are projected to rise 9% in 2027, the highest medical cost trend in nearly two decades, according to PwC's annual "Health Behind the Numbers" report, published June 11. e projection reflects mounting pressure from provider reimbursement demands, pharmacy spending, behavioral health utilization, AI-driven revenue optimization and out-of-network payment disputes. PwC argued that without meaningful cost-management interventions, rising healthcare spending could strain affordability, coverage and access across the healthcare system. Seven things to know: 1. Medical cost trend is expected to hit its highest level in 17 years. PwC expects a 9% medical cost trend for the commercial group market in 2027 and 8.5% for the individual market. e firm also revised its 2026 forecast upward, raising projected group market trend from 8.5% to 9% and individual market trend from 7.5% to 8.5%. 2. Healthcare spending could reach $9 trillion annually by 2035. Healthcare affordability is becoming a growing concern as costs continue to rise faster than many traditional cost-containment strategies can offset. PwC predicts health plans will increasingly adjust premiums, benefits, network designs and utilization management strategies to control costs. Employers are expected to reassess benefit offerings, vendor relationships and funding arrangements, while consumers may face higher deductibles, increased cost sharing and fewer coverage options. PwC said health plans still have several levers available to help moderate spending, including payment integrity programs, targeted utilization management, pharmacy management, network optimization and more disciplined care management. However, the report described the current environment as a "watershed moment" for healthcare leaders and warned that the window to slow healthcare inflation is narrowing. 3. Provider reimbursement pressure continues to intensify. Hospital and related service inflation reached 7.59% year over year in February 2026, one of the highest levels seen since the pandemic, according to PwC. Consolidation, labor costs, inflation and provider-led revenue optimization efforts are giving health systems greater leverage in reimbursement negotiations. 4. AI-powered provider tools have become a big cost driver. Seventy percent of health plans surveyed by PwC ranked AI-enabled documentation and coding tools among their top three healthcare cost inflators. Providers are increasingly using AI to improve clinical documentation and capture greater patient severity, resulting in higher reimbursement levels and larger claim payments. 5. e No Surprises Act is creating a new reimbursement challenge for payers. PwC identified the independent dispute resolution process established under the No Surprises Act as a growing healthcare cost inflator. Providers prevailed in 88% of reimbursement disputes with health plans in 2025, accounting for about 2.6 million arbitration cases. PwC said the trend is increasing out-of-network reimbursement costs and creating greater financial uncertainty for health plans and self- funded employers. 6. Pharmacy spending remains one of healthcare's fastest-growing cost categories. PwC identified pharmaceutical spending as a major contributor to rising medical costs, driven by specialty drugs and growing use of GLP-1 medications. Nearly 3.5 million GLP-1 prescriptions were filled in December 2025, almost double the volume recorded a year earlier. PwC noted that many high-cost therapies now serve broader patient populations and face limited competition, making traditional formulary management strategies less effective. 7. Behavioral health utilization continues to surge. Behavioral health claims utilization increased 62.6% between 2018 and 2024 and grew another 10% from 2023 to 2024 alone, according to the report. Unlike many other healthcare cost drivers, PwC said behavioral health spending growth is being driven primarily by higher utilization rather than rising prices. While the trend reflects improved access to mental healthcare, it is also creating additional cost pressure for health plans and employers. n