McKinsey November 18, 2025
Payers and health systems must act now to respond to unprecedented forces that could cause margin pressures of up to 5.5 and 13.0 percentage points, respectively.
In 2022, McKinsey anticipated a “gathering storm” that would challenge affordability and access in healthcare, threatening the industry’s economic outlook. At the time, rising healthcare input costs were being felt primarily by health systems. But our analyses led us to believe that these higher costs would eventually be passed on to payers and employers as well, leading to compressed margins unless the industry acted to increase productivity.
This forecast has largely been realized: Employers are facing nearly double-digit rate increases. Payers are contending with rising healthcare utilization, costs, and medical loss ratios. Given insufficient...
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