Five Medical Cost Trends to Watch in 2027

1. Specialty drugs keep expanding past GLP-1s

GLP-1s will remain a headline in 2027, but I increasingly see them as a symptom of a larger pattern rather than the whole story. Employer healthcare costs grew nearly 8% in 2026 — the steepest increase in over a decade — with pharmacy spend alone up close to 15%, driven jointly by GLP-1 utilization and other high-cost specialty categories.¹ Among employers who named specialty drugs as their top cost driver, GLP-1s led the list, but autoimmune/inflammatory therapies and cancer drugs weren’t far behind.¹

How can this be managed better? The question shouldn’t start with “how expensive is this drug?” It should start with “what outcome are we trying to achieve, for which patient, at which time?” GLP-1s are genuinely remarkable therapies for the right patient. But we’ve spent decades managing utilization in this industry when what we actually need to prioritize is matching clinical evidence, patient characteristics, benefit design, and longitudinal outcomes to decide where a therapy creates real, durable value and healthier patients.

2. Chronic disease and rising acuity keep concentrating spend

Roughly 90% of U.S. healthcare spending is associated with people managing chronic and mental health conditions.² I come back to that number often, because I don’t see it as just a medical statistic. It’s a signal that chronic disease is simultaneously an engagement problem and an information problem. Cancer has emerged as a particularly concentrated driver, combining rising diagnosis rates with the escalating cost of specialty and biologic treatment.³

The opportunity I see for 2027 isn’t better retrospective reporting, it’s earlier insight. By the time a high-cost claim shows up in a historical report, the window for earlier, more cost-effective intervention has often closed.

3. Provider consolidation keeps pressuring unit cost and transparency becomes the counterweight

Consolidation among health systems and provider groups is going to keep reshaping unit cost into 2027. I’ll be candid: consolidation is often framed as an efficiency play, but in my experience it frequently increases negotiating leverage and drives reimbursement up rather than down.

This is where transparency stops being a buzzword and becomes a practical tool. Claims visibility and network transparency don’t just support compliance; they give benefits leaders a defensible basis for site-of-care and network design decisions instead of guesswork.

4. Labor pressure is a quiet but persistent cost driver

It doesn’t generate headlines the way a new drug class does, but workforce economics for physicians, nurses, pharmacists, and other clinical staff continues to push costs upward. I’ve watched this from inside the system: these are professionals who are expensive to train, recruit, and retain, and that pressure flows directly into the cost of delivering care — independent of what’s happening in the drug pipeline.

5. AI becomes a visible cost factor on both sides of the claim

This is new for 2027 forecasting: AI is now being named explicitly as a healthcare cost-trend factor, not just a potential solution.¹ Hospitals are using it to optimize billing and coding; payers are using it to sharpen claims adjudication.

My take is more pointed than “AI will fix this.” AI isn’t the transformation — trusted intelligence is. AI is only valuable to the extent it helps us move from descriptive analytics (“what happened”) to predictive (“what’s developing”) to prescriptive (“what should we evaluate next”). A dashboard that surfaces more data without helping someone decide what to do with it isn’t progress, in my book.

Clarity in action

None of these five trends are new in isolation. What’s different heading into 2027 is that they’re compounding at the same time, inside a system where clinical, financial, and pharmacy data are often still fragmented.

Three years from now, I don’t want us measuring success only by whether the medical cost trend went up or down. Did people get healthier? Did we make decisions based on actionable insights grounded in clear, defensible data rather than assumption? Did better information empower leaders to act earlier? When the answers to these questions are yes, costs will go down.