Concerns about affordability are everywhere. For healthcare executives, it isn’t just a policy debate or headline; the problem goes to the heart of their business — ensuring access and quality care for consumers. The dilemma is especially daunting for insurers who bear the brunt of public anger as premiums and deductibles climb and in-network options shrink.
Without decisive action, healthcare costs will continue to spiral out of control. Just looking at employer-sponsored coverage, the average cost per employee is projected to rise by 6.7% in 2026, according to Mercer’s National Survey of Employer-Sponsored Health Plans, the largest spike in 15 years.
Administrative costs are a major part of the problem. In fact, studies have shown that they’ve grown at the same rate as clinical spending over the past two decades. This is unsustainable and puts constraints on how insurers and providers direct resources to innovation in clinical care. There are also opportunities to focus on medical costs —85% to 90% of the premium dollar that is spent on healthcare received and pharmaceuticals. For health insurers, the middle office — functions focused on getting consumers access to the right healthcare and helping them navigate the system — is critical . Broader adoption of artificial intelligence (AI) and improved use of data analytics are transforming how the middle office performs a range of functions, from harnessing actuarial insights and implementing utilization and care management protocols to reviewing provider contracts and ensuring payment integrity.
We’ve identified six future truths that will shape insurers’ middle office performance over the next five years.
1. Real-Time Medical Cost Monitoring Becomes Standard
Plans today manage cost trends retrospectively. By 2030, greater data integration across payers, care delivery providers, pharmacies, combined with advanced analytics and AI, will allow insurers to get real-time information and become more proactive in identifying and tackling cost and utilization spikes.
Some plans, including Blue Cross Blue Shield of Michigan and UnitedHealth Group are using advanced analytics to predict high-acuity clinical conditions, as well as social determinants of health months in advance, allowing them to intervene earlier – helping consumers avoid getting sicker. This shifts the mindset from being reactive to proactive and should have a significant impact on the patient experience and overall cost to the system in the future.
2. Care Delivery and Network Models Undergo Structural Transformation
As markets continue to be impacted by provider consolidation, the silver tsunami is influencing how and where care is delivered. The Medicare population is projected to reach 80 million beneficiaries by 2030, when all baby boomers will be at least 65 years old. That will help drive an expansion of alternative care sites, including the home. The industry is also moving, albeit slowly, to using price transparency information and benefit structures to challenge differential, negotiated rates and create better consumer-facing product structures.
Payers will respond to these trends with narrower networks, deeper provider partnerships, and targeted investments in lower-cost sites of care. At the same time, the line between payers and providers will blur even further as both look for ways to help consumers get the care they need at affordable prices. Insurers will need to juggle maintaining legacy, acute care incumbents with new entrants, including those offering a digital-first approach. We expect the next five years to give rise to a meaningfully different, and potentially simpler, set of network offerings to meet consumers more squarely where they are and give them what they want — better understanding of where to get care, for what, and how much it will cost.
3. AI Takes a Leading Role in Care Delivery
Consumers who trust AI are 5.5 times more likely to feel comfortable using it to manage their healthcare, according to the 2025 Edelman Trust Barometer. As the technology and use cases evolve, AI will play a larger role in the front lines of care delivery, including clinical decision-making, comprehensive chart review with deeper analysis of medical literature, and earlier detection of disease risks. AI will also play a role in helping patients navigate their care journey, including self-triage to find the right care setting.
For the middle office, this represents both an opportunity and a mandate: to integrate AI-driven insights into medical management workflows and ensure clinical teams have the tools to operate at the top of their licenses. This evolving dynamic also will have bearing on new network structures of the future – how will AI providers play a role in access to care and ‘traditional’ provider networks? What should medical and payment policies consider when AI is delivering the care? These will be crucial questions to answer in the next five years.
4. AI Reshapes Utilization Management and Payment Integrity
Broadly, AI has driven advancements in provider revenue cycle management, which has outpaced solutions in other parts of the industry. Sizeable investments are being made in ambient listening, coding automation, and clinical decision support. In fact, we estimate that ambient listening will have a compound annual growth rate of 30% or more over the next decade.
Payers will adapt over the next five years by automating large portions of utilization management, and payment integrity, making it quicker and easier to apply these solutions to a greater volume of claims and clinical data. This automation will focus on approvals – moving more through the system faster – while human clinical review will still manage situations where care may be inappropriate or require redirection. There will be bumps in the road though. In the near term, AI could increase friction, abrasion, administrative costs, and the complexity of negotiations – as higher volumes of determinations and appeals flow through existing systems and processes. These challenges will subside over time, and we expect payers and providers to work together in new ways — less of a focus on low-value utilization management, new capabilities to resolve billing inconsistencies, new contract tools to reduce coding complexity, and more . AI agents will resolve some authorization requests in real time and billing and coding questions will get answered quicker. Payers and providers may experiment with simpler payment models as AI takes on more administrative roles in between them. The middle office will need to tailor approaches based on provider capabilities and risk profiles rather than managing all networks uniformly.
5. Provider Incentives Are Reimagined
While value-based care has seen pockets of success, industrywide adoption has stalled, including in Medicare Advantage where many risk models are underperforming. By 2030, we expect a shift back toward performance-based incentives with simpler structures, clearer outcomes alignment, and more flexibility across markets.
As payer–provider interoperability matures, enabling more real-time trend monitoring and interventions, full-risk model structures will become viable and could further reduce administrative burden on both sides. Payers will need to be flexible, recognizing performance-oriented contracts will differ between clinician specialty areas — primary care doctor versus specialist — as well as by market intent like cost of care, Medicare Advantage Stars incentives, other quality pay-for-performance efforts, and more. Tailored outcome measures will be crucial.
6. Specialty Pharmacy Becomes a Priority
Advances in cell and gene therapy and precision medicine are rapidly expanding the universe of treatable conditions. That will help ease cost pressures by 2030 through improved targeting of treatments, reduced hospitalizations, and moving more diseases into the preventable category. Payers , providers, and pharmaceutical companies will explore payment models where drug financing follows the patient. Drug warranties, which are tied to a therapy’s effectiveness, are one example. Other efforts that link payment to outcomes will promote greater collaboration between stakeholders. The middle office will own much of this orchestration, given the integration needed between other functions, including utilization and care management, patient navigation, and member advocacy.
The next five years will be pivotal for the middle office within health insurers. The affordability debate is not going away, and insurers need to be responsive. Taking steps now to act on these trends will position insurers to not only manage costs but deliver better experiences for members and provider partners.