In recent years, healthcare businesses have come under heightened pressure, dampening their financial performance. Provider organizations’ were the first to see their EBITDA performance hit hard, starting in 2022, say senior partner Shubham Singhal and coauthors. Payers were initially sheltered, but 2023 brought increased hurdles. The pharmacy services sector experienced mixed outcomes: some organizations thrived due to pharmaceutical innovation and new delivery models, while others struggled with intensified regulatory scrutiny. In contrast, the healthcare services and technology segment has steadily grown, driven by demand for data, analytics, and software.
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A stacked bar chart shows the earnings before interest, taxes, depreciation, and amortization (EBITDA) of the US healthcare industry, segmented by providers, payers, pharmacy services, and healthcare services and technology, spanning from 2019 to 2028 (with estimates for 2024 and 2028). In 2019, the providers segment had the highest EBITDA at $273 billion, while payers recorded $55 billion, pharmacy services reached $49 billion, and healthcare services and technology stood at $46 billion. Projecting to 2024, the providers segment is anticipated to reach $299 billion, with payers at $52 billion, pharmacy services at $70 billion, and healthcare services and technology also at $70 billion. In 2028, the estimated EBITDA for the overall industry is $652 billion, with the providers segment contributing $385 billion, payers at $78 billion, pharmacy services at $86 billion, and healthcare services and technology at $103 billion. The industry EBITDA as a percentage of national health expenditures shows fluctuations, starting at 11.3% in 2019, decreasing to 9.4% in 2023, a projected rise to 9.7% in 2024, and 10.5% by 2028.
Source: CMS National Health Expenditure Projections, accessed on July 5, 2024.
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To read the article, see “How the healthcare industry can weather ongoing challenges,” December 5, 2024.