Businesses investing heavily in preventative healthcare to battle skyrocketing medical inflation

18 November 2025 – More than two thirds (67%) of businesses are investing in preventative healthcare to tackle soaring medical inflation, according to the Changing Face of Employee Health report from Howden Employee Benefits, part of Howden.

The international report is the first of its kind to take a comprehensive 360 view of the medical trends landscape, analysing data from insurers, employers, and employees from key regions around the world. The report shines a light on the human element of healthcare, and the growing importance of having it as a primary benefit across the globe.

This comes as health increasingly emerges as a top priority for employees. More than three in five (61%) are now more likely to stay with an employer who offers a good healthcare package, and nearly half (47%) view it as an important factor in looking for a new role. Only 7% of global workers do not think it is an important benefit.

This emphasises the need for businesses to address their healthcare offering, but this is challenging to navigate in a high cost environment. As a result, employers are increasingly taking steps to mitigate rising costs, with the majority investing in prevention and wellbeing. 67% of employers globally have utilised this strategy, and 55% also listed it as being the strategy which has worked best for them, which is largely mirrored across the world.

Who is investing the most in prevention and wellbeing measures?

Medical inflation is driving this investment. With Howden predicting from its insurer data that medical inflation will reach 7% in 2026 - net of CPI, meaning total inflation will be well over 10% - this is going to have a profound impact on employers, leading many to restrategise and rethink their provisions. As a result, businesses are shaking up health plans despite feeling that they are already getting a good deal.

While the vast majority of employers believe their current healthcare plans meet the needs of their staff, a quarter (25%) of employees do not agree that their employer supports their wellbeing, highlighting a substantial gap - and while investment plans may be working, there is scope for improvement as a significant number of employees are yet to feel the benefit.

Howden’s report also highlights a discrepancy between what employers are planning to do against how they feel their current plans are working. The majority of global employers (86%) believe they are getting a good return on investment (ROI) from their private healthcare outlay, and 93% of global employers also believe their current health plan meets the needs of employees.

This provides an interesting disparity against potential changes employers have already made, or are planning to make. Nearly a quarter (23%) of employers have already switched healthcare providers to get a better deal and 39% are planning to do so, while 26% have not yet made plans to switch - but would consider doing so if they get a better deal.

The uplift in investment comes as 93% of global employers expect their medical costs to rise, and 41% anticipate a significant rise. While this is a major consideration across the globe, it is impacting regions differently. For example, businesses in IMEA expect medical costs to rise by 58%, compared to 27% for those in Europe (not including the UK at 28%).

Significant cost rises across other regions:

• 52%: Asia
• 46%: LATAM
• 36%: Pacific

Glenn Thomas, UK CEO and Global Practice Leader of Health & Employee Benefits at Howden, commented: “The findings show how quickly the world is shifting, with AI, new treatments and rising costs reshaping the health and benefits landscape. Employers are feeling the pressure. If organisations don’t recognise their people as their greatest asset and address people risks directly, productivity and growth will suffer. A healthy workforce is now the engine of performance.

“What stands out in the data is the gap between what employers believe they’re delivering and what employees say they’re receiving. Healthcare benefits are becoming non-negotiable for talent, yet many workers still feel their needs aren’t being met. It’s no surprise that so many businesses are now looking at substantial changes.

“Leaders can’t afford to wait. The pressures highlighted in this report show just how fast things are moving. Benefits must be both cost-effective and genuinely fit for their people.”