Rising healthcare costs continue to put pressure on employers, with trends hovering around 7–8% increases over the past few years—and projections showing no signs of slowing. What’s fueling this sustained cost growth? A mix of familiar factors and new trends are driving costs higher, and understanding what’s at play is the first step toward finding a smarter path forward.
The trends we’re seeing among M3 clients mirror what’s happening on a national scale. When digging into claims data to figure out what’s driving costs, a few key areas stand out. Two of the biggest? The types of conditions contributing most to overall spending, and the services that are increasing in cost more rapidly than others.
By looking at claims data year over year, patterns start to emerge. Conditions are grouped based on related medical and pharmacy claims, giving a clearer picture of where costs are concentrated. Right now, five condition groups are responsible for more than half of the total cost trend employers are facing. These include:
