Globally, healthcare is one of the costliest and simultaneously least efficient sectors from an economic standpoint. According to the World Health Organization, worldwide spending on healthcare grew 2.6 percent last year — and is expected to continue growing at an average rate of 5.3 percent each year for the next four years.
This situation is particularly apparent in the United States, which is projected to spend a whopping 20 percent of GDP on healthcare by 2020 (the most of any country worldwide), totaling more than $4.5 trillion. Couple this with the fact that in an age of rapidly advancing technological capabilities that have aided in improving the productivity of numerous industries, healthcare labor productivity has actually declined.
This context has produced a dynamic that has spurred massive government intervention, and spells new opportunity for incumbents, entrepreneurs and investors alike. We are on the cusp of a new generation of healthcare: a transition from sick care to well care, aided by the application of technology to help vastly improve individual patient outcomes and lives. No existing stakeholder will be left untouched, which makes us incredibly excited about what will become one of the biggest industry upheavals and revitalizations in history.
The days when providers could afford (and were incentivized) to be inefficient are rapidly coming to a close, as they must now balance the seemingly countervailing goals of cutting costs and improving care. While some are attempting to reconcile these dynamics through more traditional consolidation and administrative moves, nearly all are embarking upon a drastic upheaval in the foundational strategy of their organizations. Read More