Analysis: Health costs expected to increase 9% in 2027

Health plans expect health costs to spike by 9% next year, the highest annual increase in more than two decades, according to a new analysis from PwC (Source: “Healthcare costs poised to jump 9% in 2027 as health plans blame AI adoption, drug prices,” Fierce Healthcare, June 11).
 
Payers are pointing the finger at several inflationary factors, including the increasing use of artificial intelligence tools by health systems, hospitals and medical practices. AI-enabled documentation and coding tools allow providers to capture greater specificity and reimbursable severity without proportionate increases in care intensity, according to PwC's report. As a result, payers see higher paid amounts per claim. 
 
Seventy percent of health plans rank provider AI tools as a top-three cost driver. For example, more detailed note-taking leads to more itemized reimbursement claims, inflating costs for plans, according to the analysis.

Health plans also cite growing provider reimbursement pressure, rising pharmacy spending, particularly specialty drugs and higher-cost GLP-1 therapies and sustained growth in behavioral health utilization as utilization surged 62% from 2018 to 2024. 
 
This spring, HPIO released a series of publications as part of its Healthcare Access and Affordability in Ohio project, which examined how recent policy changes, such as the federal reconciliation bill (HR 1) and the state budget bill (HB 96), will impact access to care and affordability in Ohio.