Understanding the Real Drivers Behind Rising Healthcare Costs

Healthcare costs are rising, but not necessarily for the reasons you might expect.

Recent claims insights show that cost pressures are increasingly driven by a shift in how employees use healthcare. Private Medical Insurance is no longer just a safety net for serious illness, it’s now a key part of everyday healthcare.

From reactive cover to everyday use

Employees are using Private Medical Insurance more frequently for GP appointments, diagnostics, mental health support and physiotherapy. As access to NHS primary care remains under pressure, private cover is increasingly filling the gap.

This shift is particularly evident among younger employees, who are far more likely to engage with their benefits early and often. As a result, utilisation is rising, but so is access to timely care.

Earlier access, better outcomes

Digital healthcare has transformed how quickly employees can get support. Virtual GP services and faster referral pathways mean issues are addressed earlier, often before they escalate into more complex and costly conditions.

While early access can increase claims volumes in the short term, it also supports faster recovery, better outcomes and reduced reliance on hospital-based treatment over time.

Mental health and Musculoskeletal: rising use, smarter care

Mental health and musculoskeletal conditions are now among the most common claim types.

Use of talking therapies and physiotherapy has increased significantly, while inpatient and day-patient care in these areas has reduced. This reflects a move towards earlier intervention, helping employees recover sooner and avoid more intensive treatment later.

Innovation and complexity still play a role

Advances in medical treatment, particularly for complex conditions such as cancer, are also contributing to rising costs. New therapies and improved diagnostics are delivering better outcomes, but often at a higher upfront cost.

Understanding how these trends affect your own scheme is key to managing long-term affordability.

How Corpad supports employers

Rising healthcare costs doesn’t mean your Private Medical Insurance scheme isn’t working, but they do mean it’s worth reviewing whether it still meets the needs of your workforce.

Corpad partners with employers to deliver healthcare strategies that are sustainable, competitive and engaging, through:

• Strategic review and optimisation of existing Private Medical Insurance schemes
• Considering complementary solutions, such as Health Cash plans, to support everyday healthcare needs
• Data-led analysis and benchmarking
• Flexible and voluntary healthcare solutions
• Clear employee communication and ongoing support

The result is a benefits programme that supports employee wellbeing, strengthens retention, and helps manage healthcare costs more effectively over time.