PwC Behind the Numbers 2027: Medical Cost Trend Hits 9%

Bypaulgruensfelder
PwC June 11, 2026
Read Full Article →
AI-Generated Summary

Commercial medical cost trend is projected to reach 9% in 2027 — the highest in 17 years — according to PwC’s Behind the Numbers 2027 report. Five inflators drive the increase: AI-enabled tools that help providers capture more revenue (ranked a top-three inflator by 70% of health plans), rising provider reimbursement amid consolidation (hospital services inflation hit 7.59% year over year in February 2026), growing pharmacy spend (3.5 million GLP-1 prescriptions filled in December 2025, nearly double a year earlier), a 62.6% rise in behavioral health utilization from 2018 to 2024, and No Surprises Act arbitration, where providers win 88% of payment disputes. With external deflators largely exhausted, PwC argues payers must lean on benefit design, network design, and utilization management to bend the curve.

Why It Matters

For multi-site operators and PE-backed groups, a 9% cost trend signals tightening payer scrutiny on reimbursement and utilization — and rising employer-plan costs. The same AI revenue tools fueling the trend are becoming table stakes, while network and payment-integrity pressure will reshape contract negotiations.

medical cost trend payer cost management GLP-1 spending behavioral health utilization provider reimbursement no surprises act RCM automation

While we aim to share useful and relevant resources, we do not guarantee the accuracy of content on this site or any external links. Views and opinions expressed in referenced content do not necessarily reflect those of Healthcare Growth Strategies.

Frequently asked questions

How high will medical cost trend be in 2027?

PwC projects commercial medical cost trend will reach 9% in 2027 — the highest level in 17 years. The Group market is projected at 9% and the Individual market at 8.5%, and PwC restated its 2026 trends upward to 9.0% and 8.5% respectively.

What is driving the 2027 healthcare cost increase?

Five inflators drive the trend: AI-enabled tools that help providers capture more revenue, provider reimbursement pressure amplified by consolidation, rising pharmacy spend led by GLP-1s, a 62.6% jump in behavioral health utilization since 2018, and No Surprises Act arbitration, where providers win 88% of disputes.

What can payers do to slow medical cost trend?

With external deflators like biosimilars and generics already baked into baselines, PwC says payers must use levers they control directly — benefit and formulary design, network design, utilization management, and claims and payment integrity. Network design and reimbursement are the strongest long-term levers for resetting the cost baseline.

Similar Posts

  • Dental M&A Rebounds: 175 Practices Sold in H1 2026 as Valuations Head Lower

    Bypaulgruensfelder

    Dental practice M&A activity rebounded in the first half of 2026, with at least 175 practice locations sold to DSOs, private equity groups, and other buyers, according to TUSK Practice Sales, a figure the firm says likely undercounts actual volume due to reporting lag. Current valuations range from 5x to more than 9x EBITDA, but TUSK expects multiples to compress toward 4x-6x as dentistry matures into a more consolidated industry, with DSOs still structuring 60% to 85%+ of deal consideration in cash at closing. ADA data show 16.1% of U.S. dentists were DSO-affiliated in 2024.

  • Healthcare M&A Trends Q2 2026: PPM, Outpatient, and PE Scrutiny

    Bypaulgruensfelder

    Healthcare M&A stayed steady in Q2 2026, driven by consolidation, AI integration, and cross-sector deals despite intensifying scrutiny of PE-backed MSO arrangements. Physician practice management remained active, with enablement platforms like Privia Health offering an alternative to full-ownership roll-ups. Ascension closed its AMSURG acquisition to become the third-largest ambulatory surgery center platform. For-profit systems kept divesting non-core assets—CHS sold Crestwood Medical Center for $459 million and four Arkansas hospitals to Freeman Health, part of a $1.2 billion, nine-hospital divestiture plan. Home health, hospice, and behavioral health saw continued PE-backed roll-ups, while digital health and health IT capital concentrated around scaled, high-performing platforms amid tariff-driven volatility and antitrust pressure.

  • Commure Targets the 35–50% of Referrals That Never Convert

    Bypaulgruensfelder

    Between 35% and 50% of medical referrals never result in a completed specialist appointment, and those that do take 31 days on average — a gap Commure’s new Orchestrator platform aims to close by automating end-to-end referral management and patient intake. The AI platform replaces fax-based referral workflows, targets referral leakage, and cuts pre-visit administrative work such as authorization holds and manual hand-offs. Commure frames the economics plainly: every unconverted referral is both a patient lost to follow-up and revenue that never shows up on the books. The launch adds to a fast-growing category of AI tools aimed at the pre-visit workflow, where leakage and intake friction remain among the most measurable revenue drains for multi-site provider groups.

  • Select Medical Goes Private in $3.9B Welsh Carson-Led Deal

    Bypaulgruensfelder

    Select Medical Holdings completed a $3.9 billion take-private on July 1, 2026, led by its founders and private equity firm Welsh, Carson, Anderson & Stowe at $16.50 per share — an 18% premium to its pre-announcement close. The Mechanicsburg, Pa. operator runs outpatient physical therapy (including NovaCare) across roughly 1,850 locations in 36 states, plus 104 long-term acute-care hospitals and 38 rehabilitation hospitals, with more than 45,000 employees and $5.5 billion in 2025 revenue. Management rolled equity alongside the sponsor, keeping operating leadership invested through the next value-creation cycle in post-acute and outpatient rehab.

  • How RCM Performance Drives ASC Valuation Multiples in 2026

    Bypaulgruensfelder

    Ambulatory surgery centers preparing to sell in 2026 are seeing buyers price deals on revenue cycle performance as much as case volume, according to VMG Health. Historical ASC sale multiples have run 7-8x EBITDA, with best-in-class centers commanding double-digit multiples, but VMG Health’s deal team says buyers now apply heavier diligence to collections discipline, payer mix, and denial management before underwriting that premium. The firm, drawing on transactions led by Christa Shephard, Chad Zoretic, Debra Stinchcomb, and Nancy Stephens, also flags leadership and management infrastructure and physician alignment as valuation drivers distinct from financial metrics, since centers dependent on one or two physicians or lacking a transferable management layer carry higher post-close execution risk that buyers price into their offers.

  • 73% of Healthcare Sites Run Ad Trackers That Ignore Opt-Outs

    Bypaulgruensfelder

    73% of 59 major U.S. hospital and clinic websites were running advertising or marketing trackers even when visitors sent an active Global Privacy Control opt-out signal, according to an independent audit conducted by Verified Data for Piwik PRO. Sixty-nine percent used marketing or advertising cookies, and the narrow gap between the two figures indicates some trackers operate without cookies — meaning cookie-blocking alone does not close the exposure. Scans detected 75 unique tracking tools across the sites, including Google Marketing Platform on 33 domains and Google Analytics on 20. Cumulative healthcare pixel enforcement actions and settlements have exceeded $100 million since 2023.