8 June 2018
Why the evolving healthcare services and technology market matters
Healthcare services and technology is among the fastest-growing profit pools — with substantial headroom for platform players.
Healthcare services and technology is among the fastest-growing profit pools — with substantial headroom for platform players.
The healthcare services and technology market is growing rapidly, bringing opportunities, risks and structural questions for incumbents and new entrants alike.
It has been among the fastest-growing profit pools over the past five years. Technology advances address roughly $0.5 trillion in annual waste and low productivity. Focus to date has centred on medical cost and quality (population health) and administrative efficiency (revenue cycle), with approximately $35 billion aggregate EBITDA in 2016 and about 7% per annum EBITDA growth versus traditional payers and providers.
There is more than $500 billion of headroom, and platform players or ecosystem integrators may emerge. Venture capital and private equity deployed at least $60 billion into healthcare services from 2012 to 2017, excluding internal investment.
Authors (source attribution on original site): Prashanth Reddy, Elina Onitskansky, Shubham Singhal, Sri Velamoor (McKinsey).