McKinsey’s Center for US Healthcare Improvement collaborates with healthcare leaders and researchers to combine qualitative analysis with proven operational approaches. Our goal is to deliver actionable insights on how the US healthcare system could improve patients’ access to affordable, high-quality care.
Since the early 2010s, US healthcare spending growth has slowed, though COVID-19 has introduced disruptions to the trend. Recently, high inflation rates and labor shortages characterized the economic environment, raising questions about what the forward-looking trajectory will be in the coming years. Our research focuses on examining how underlying micro factors are trending and the implications on overall healthcare spending.
Administrative spending represents about $1 trillion, or 25 percent, of total US healthcare spending. Of these, five functional focus areas represent 94 percent of this spending and there are over 30 known interventions that could save up to $265 billion annually. For decades though, stakeholders have acknowledged a substantial savings potential and agreed administrative simplification should be a priority, yet the opportunity remains.
Our research focuses on scaling these known interventions to eliminate excess administrative spending without affecting quality and access for patients.
Venture-capital and private-equity funding of healthcare solutions has increased greatly in the last decade, with technology and AI being one of the largest investment areas. Further, healthcare organizations are facing adoption challenges given the rapid pace that new solutions are becoming available.
Our research quantifies and identifies adoption challenges to scale these technologies, such as the up to $360 billion net savings opportunity enabled by AI.
Today, over $3 trillion has been invested in infrastructure, such as buildings and furniture, in the US healthcare system, but little focus is given to the healthcare system’s balance sheet. Further, the US healthcare capital footprint is inherently hospital-centric due to choices made over the last century.
Our research quantifies the capital productivity benefits of interventions such as alternative sites of care.
