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Is Healthcare A Drag?

Yes, says McKinsey in this article on reducing the drag on the American Economy.  Fixing healthcare is first on the agenda.

GDP growth is not going to happen "...until we free ourselves from four anchors that have acted as a drag on growth in this country for many years now: lagging productivity in healthcare, education, energy and infrastructure, and government services."

[...]

"In 2008, the United States spent $2.3 trillion on healthcare—that’s more than we spent on food, and more than China spent on everything. Adjusted for population, we spend $650 billion more on healthcare than any other developed country, yet our outcomes are no better. Much of this $650 billion in excess costs is driven by characteristics of our system that have proven difficult to change, including unusually high costs for outpatient programs, local market oligopolies, a failure to apply known best practices, price-insensitive patients who don’t see the cost of their healthcare and contribute little toward paying for it, and inefficient healthcare administration.

"Recently passed healthcare reform dramatically expands coverage, but we must now shift our attention to bending the cost curve. With an aging population, the demand for healthcare services will inevitably rise—indeed, even throughout the great recession, unfilled positions in healthcare in the United States have never dropped below 500,000. We need to find ways of meeting current and future demand at lower costs. Unless we do so, we will never be able to make progress on the deficit or overcome such a large “productivity tax” on our economic growth. So how do we achieve a more productive and value-based healthcare system? The way to start is by demanding more transparency, by designing better incentives, and by scaling approaches we already know work across the country."


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