Medical inflation in Indonesia is set to climb to 17.8% in 2026, more than seven times the country’s general inflation rate of around 2.5%, according to the Health Trends 2026 report from Mercer Marsh Benefits. The projection places Indonesia’s healthcare cost growth among the highest in Asia. The report attributes the surge to a combination of currency-driven rises in the price of imported medicines and devices, the adoption of costly advanced medical technologies, and a post-pandemic increase in patient demand for services. Inefficiencies including fraud, waste and abuse may add up to 5% to the industry’s claims ratio, the Indonesia Anti-Fraud Forum estimated in 2025. The financial strain is already visible: data from the Indonesian Life Insurance Association show health claims payments reached Rp26.8 trillion in 2025, a 9.2% year-on-year increase that outpaced premium growth.

That pressure is not confined to Southeast Asia. An analysis by the Medical Group Management Association in the United States found that compensation for medical practice staff—from receptionists to licensed practical nurses—rose between 15% and 30% over the five years to 2025. Medical receptionists’ median total pay climbed 22% to $44,569, while LPNs saw a 29.7% increase to $60,438. “Practices are in a phase where labour costs aren’t falling in a meaningful way, even as wage growth slows,” said Akash Madiah, acting CEO of MGMA. In Bangladesh, a joint assessment by the Bangladesh Red Crescent Society and the International Federation of Red Cross and Red Crescent Societies of 2,746 families affected by a measles outbreak found that nine out of ten households had to borrow money to cover treatment-related expenses, and six out of ten exhausted their savings. Although care in public hospitals is nominally free, families spent an average of 16,000 taka on transport, food, tests and medicines; 78% of those surveyed work in the informal sector with monthly incomes between 6,000 and 20,000 taka.

At the macro level, the financing gap is widening. The World Bank notes that per capita public spending on universal health coverage in low- and middle-income countries is about half of minimum benchmarks, and the per capita gap with high-income countries has more than tripled since 2000. Development assistance for health, which peaked during the COVID-19 pandemic, is retreating sharply: the United States cut its foreign assistance by 67% in early 2025, and the United Kingdom, France and Germany followed with reductions of 39%, 35% and 12% respectively. The OECD warns that health funding could drop by up to 60% from its 2022 peak. Meanwhile, UNCTAD reports that developing countries paid a record $921 billion in net interest payments on public debt in 2024, leaving less fiscal room for health.

In response, some operators are restructuring care delivery to contain costs. In Brazil, the Goiânia-based operator Novamed has built a model centred on preventive medicine, offering consultations in general practice, cardiology and paediatrics without copayment, and is constructing its own 40-bed high-complexity hospital focused on oncology and haemodynamics, due for completion in 2027. The strategy, coordinated by Dr Júlio Ferro, aims to reduce reliance on third-party hospitals and keep premiums affordable after health plan prices rose 327% over 18 years, according to the Institute for Health Policy Studies. In Indonesia, Prudential Indonesia’s chief health officer Yosie William Iroth called for collaboration among hospitals, insurers, government and the public to maintain access while safeguarding the sustainability of health financing. “The rise in healthcare costs due to medical inflation is a reality faced by the entire healthcare ecosystem,” he said.

Viewed from New Delhi, the way forward may lie as much in how money is spent as in how much is available. A parliamentary panel in India found that only about two-thirds of the allocation for the flagship health infrastructure mission was spent in 2024-25, and just 26% of funds earmarked for disease programmes under the National Health Mission were utilised. The London School of Hygiene & Tropical Medicine estimates that India spends less than one-fourth of its public health budget on preventive care. The next milestone to watch is whether governments and insurers can shift spending towards primary and preventive services before the cost of curative care forces harder choices on households and public balance sheets alike.