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Health care costs: A market-based view

Over the past 50 years, spending on health care has consistently outpaced broader economic growth. What will happen if that trend persists? What forces might accelerate or slow it?

01/09/2008
Jean P. Drouin, Viktor Hediger, Nicolaus Henke
McKinsey Quarterly
Health care costs: A market-based view

Throughout the world, leaders of government health agencies, heads of health care companies, and even patients—collectively, the shapers of the modern health care system—behold the growth of health care spending with alarm. For almost 50 years, spending has grown by 2 percentage points in excess of GDP growth across all Organisation for Economic Co-operation and Development (OECD) countries. As a result, health care has become a much bigger part of most of these economies.
If current trends persist to 2050, most OECD countries will spend more than a fifth of GDP on health care. By 2080 Switzerland and the United States will devote more than half of GDP to it—and by 2100 most other OECD countries will reach this level of spending.
Health care leaders fervently hope that the projections are off the mark. What will have to change to prevent health care from devouring half of a national economy?

 

Health care costs: A market-based view

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