How to cut costs while retaining quality

Healthcare is expensive—and it doesn’t look like it’s getting more affordable any time soon. According to the International Foundation of Employee Benefit Plans (IFEBP), organizations projected a 10% increase in healthcare spending for 2026.

Understandably, many employers are looking for ways to cut costs, and the temptation is to look everywhere at once. You think you should start renegotiating carrier contracts, tweaking plans (like raising deductibles), or rolling out a wellness program.

None of those changes is a bad idea. But spreading your cost-containment efforts too thin often means you likely won’t focus on any one area enough to make a real difference.

In many cases, it’s better to take a more targeted approach to see if you can find places where a small number of claims are driving a large chunk of your costs. One area worth a closer look? Specialty care.

Understanding the categories and costs of specialty care

Specialty care describes any medical services that go beyond what a primary care physician provides—think things like complex diagnoses, serious or chronic conditions, or treatments that require specialized training, equipment, or facilities.

Rather than a general practitioner, this type of care is delivered by specialists like surgeons, oncologists, cardiologists, addiction medicine physicians, and others with deep expertise in a specific area of medicine.

Specialty care is obviously less common than a routine checkup. But what might surprise you is just how much of the bill it accounts for. Outpatient specialist visits alone account for 20% of total healthcare spending. Add in inpatient procedures, specialty medications, and the management of complex conditions, and it’s easy to see why specialty care makes up more than half of total healthcare spend.

But to understand why specialty care has such a big impact on employer budgets, it helps to break it down into its main categories—each with its own costs and implications for employers.

Conditions with high ongoing costs

Conditions like cancer, cardiovascular disease, and substance use disorders require continuous treatment and management—and data show that those costs add up fast:

• Cancer is the number one driver of employer healthcare costs, with many large self-insured organizations reporting that cancer care contributes to 15% of their annual healthcare spend.
• Cardiovascular disease is also a major and growing cost driver. According to the CDC, it costs the U.S. healthcare system $223 billion per year.
• Employers spend an average of $15,640 more per year on employees with a substance use disorder diagnosis compared to similar employees without one—adding up to $35.3 billion annually across the employer-sponsored insurance population.

Not only do these conditions come with high healthcare bills, but they also introduce other indirect costs like increased absenteeism and lower productivity. For employers, the financial impact of these conditions extends well beyond what shows up on a claims report.

Procedures with high per-episode costs

Specialized procedures, such as orthopedic surgeries or imaging (like MRIs and CT scans), don’t have the same volume as chronic conditions. But when they do happen, they’re big claims:

• The average cost of a knee replacement surgery in the U.S. is $20,000. But other research estimates the median cost to be closer to $68,000.
• The cost of spinal surgeries can be all over the board. Median direct costs for a single-level lumbar fusion, as just one example, come in at $21,781. But complexity drives the price up fast. A 2024 study found that multilevel anterior-posterior column lumbar fusion costs an average of $55,034 per procedure, and total inpatient costs for spinal fusion surgeries reached $14.1 billion nationally in 2023.
• The cost of MRIs varies by body part, but these scans often come with a hefty price tag. A single MRI can cost anywhere from $500 to $11,800.

Unlike chronic conditions, these costs don’t stack up slowly. They arrive all at once, which can make them particularly tough to anticipate and budget for.

Specialized pharmaceuticals

Specialty drugs are a broad category that includes medicines such as biologics, immunologics, oncologics, metabolic and cardiovascular medications, and more. And, put simply, they come at a very high cost.

The average annual price of specialty drugs has tripled over the last decade, and they now make up half of all pharmaceutical spending. Depending on the medication, specialty drugs can cost anywhere from $2,000 per month per patient to hundreds of thousands of dollars per year.

Just take a look at Adalimubab (better known by its brand name Humira). It’s the world’s top-selling pharmaceutical and is used for a variety of autoimmune and inflammatory conditions, but it comes at an eye-popping price. It costs over $7,000 for a 30-day supply, and employers spent more than $15 billion on Humira alone in 2020.

GLP-1s are another emerging specialty drug class having a big impact on employers’ bottom lines. 55% of employers cover GLP-1s for diabetes, while 36% cover them for both diabetes and weight loss—and both lead to significant spending. Before insurance, the average cost of GLP-1s is around $1,000 per month, which means covering even a handful of employees on these medications can add up quickly.

Employers are taking notice. In 2025, 64% of large employers said GLP-1 drug coverage moderately or significantly impacted their prescription drug spending, and 77% of them said that managing the costs of GLP-1s is extremely or very important.

Why is specialty care such a big cost driver?

Roughly one-third of Americans are referred to specialty care each year. Sure, that’s a significant portion of the population—but it’s still technically a minority. So why does it account for such a large share of employer healthcare spend?

It’s not about prevalence. It’s about price.

Most healthcare spending is relatively dispersed. Routine care (including primary care visits, basic lab work, or preventive screenings) is common, but the per-visit cost is comparatively low.

That’s not the case with specialty care. The conditions, procedures, and medications we highlighted above might affect a smaller slice of your workforce, but each one carries a price tag that can eclipse a year’s worth of routine claims for another employee.

Research from the Agency for Healthcare Research and Quality found that the top 5% of healthcare spenders account for nearly 50% of all healthcare expenditures. That means a relatively small number of employees with high-cost specialty care needs are driving an outsized share of costs.

For employers, that’s actually good news (even if it doesn’t feel like it). Your spending problems are addressable—as long as you focus on the right things.

What specialty care means for your benefits strategy (and your bottom line)

When costs seem like they’re snowballing, many employers give in to a knee-jerk reaction and try to pass more of the burden to workers. 51% of large employers said they planned to make changes to their benefits plans that would shift more costs to employees.

But this just relocates (rather than reduces) healthcare spending. It’s also not a positive or supportive experience for your employees who are already grappling with serious or costly health issues.

Because specialty care accounts for a large share of spending, it’s the perfect place to start a more targeted strategy. Employers who treat specialty care as a specific cost center (instead of one piece of general medical spend) can better control costs with efforts like:

• Centers of Excellence programs that steer employees to high-quality, high-value providers for complex procedures and conditions (and often bundle care into a predictable price)
• Value-based care arrangements that tie payments to outcomes instead of volume
• Care navigation programs that help employees find and access the right care instead of figuring it out on their own

Each of these treats specialty care as the specific, addressable cost driver that it is.

Unfortunately, specialty care costs aren’t going away. But they’re far more manageable when employers know where to look and have the right programs in place to address them.

Carrum Health helps you do exactly that. By connecting employees to high-quality specialists and centers of excellence (with transparent, bundled pricing), Carrum makes it easier to manage specialty care costs.