The U.S. healthcare system continues to face considerable financial strain, with industry EBITDA as a percentage of national health expenditures falling from 11.2 percent in 2019 to 8.9 percent in 2024, and expected to worsen slightly to 8.7 percent in 2027. Payers and providers have borne the brunt of the decline to date and will continue to feel financial pressure, with payers facing enrollment declines in Medicaid and Affordable Care Act plans and providers experiencing increased uncompensated care.
Overall healthcare EBITDA is estimated to grow annually at 5 percent in 2024–27 and then at 10 percent annually in 2027–29. Certain segments face particular challenges: EBITDA levels in payers hit historic lows in 2024, driven by increased utilization, rising GLP-1 adoption, and membership losses following the pandemic-era public health emergency. Healthcare providers are navigating a complex recovery, with rising levels of uncompensated care expected to pressure EBITDA margins in 2027, with annual EBITDA growth from 2024 to 2027 estimated at just 1 percent.
However, opportunities exist in several parts of the industry. Health services and technology, specialty pharmacy, and ambulatory care in the provider space are continuing to grow rapidly. Post-acute care, particularly home health and hospice, remains a strong growth area supported by an aging population. Health services and technology is expected to continue as the fastest growing segment in healthcare, with software platforms and technology-enabled services helping providers and payers become more efficient. Pharmacy services are undergoing sweeping change, with specialty drugs and GLP-1 therapies reshaping the cost structure of pharmaceutical care. Drug net spending rose by 11 percent from 2023 to 2024, largely due to innovative therapies such as GLP-1 agonists, and U.S. gross drug expenditure is anticipated to grow by about 8 percent annually from 2024 to 2029, potentially reaching $990 billion by 2029.
This article is an AI-assisted summary. All facts and figures are drawn from the original report: https://www.mckinsey.com/industries/healthcare/our-insights/what-to-expect-in-us-healthcare