US Healthcare Industry: An Augmenting yet Declining Industry
3 min read
The healthcare industry is a vital part of the US economy, accounting for more than 17% of GDP. The industry is expected to grow in the coming years, reaching nearly $5 trillion by 2025. The healthcare sector employs more than 18 million people, making it one of the largest employers in the United States.
The US healthcare industry is expected to experience significant changes in the next five years. These changes include an increasing focus on value-based care, the continued expansion of telehealth, and the rise of artificial intelligence (AI) in healthcare.
Value-based care is a type of healthcare delivery that focuses on providing care that is based on the value it provides to patients, rather than the volume of care delivered. This type of care is expected to become more common in the US as payers (such as insurance companies) increasingly reimburse providers based on the quality of care they deliver, rather than the number of services they provide.
Telehealth is the use of technology to deliver healthcare services remotely. This type of care is expected to grow in popularity in the next five years as more patients seek care from the comfort of their own homes and as providers look for ways to improve access to care.
Artificial intelligence (AI) is expected to play an increasingly important role in healthcare in the next five years. AI can be used to help providers make better decisions about patient care, to improve the accuracy of diagnoses, and to provide patients with personalised care.
The advancement of medical technology is one of the core factors that is driving growth in the healthcare industry.
Some facts about the U.S. Healthcare Industry:
The healthcare industry is worth $808 billion in the United States as of 2021. An impressive 65% of revenue comes from patient care.
The healthcare industry comprises 19.7% of the U.S. economy as of 2020. This is significantly higher than most other developed countries, where healthcare typically makes no more than 10% of national GDP.
Healthcare is the fastest growing industry. Healthcare is the largest and fastest growing industry in the U.S. and globally. For example, between 2020 and 2030 employment for healthcare occupations is expected to grow by at least 16%.
The important question:
Is the U.S. Healthcare market efficient?
No, the U.S. healthcare market is not efficient. In fact, the U.S. healthcare system ranks 22nd out of 27 high income nations when analyzed for its efficiency of turning dollars spent into extending lives. Denmark ranked number one in healthcare efficiency.
Healthcare market efficiency is measured by looking at how much money is spent and how that translates to life expectancy. For example, every additional $100 spent on healthcare by the United States translated into a gain of less than half a month of life expectancy. In Germany, on the other hand, every additional $100 spent translated into more than four months of increased life expectancy.