Is the health care sector less productive than other sectors of the United States economy?
A literature review by Brookings Institution analysts confirms that the health care sector has "significantly lower productivity growth than the economy as a whole." Center for Medicare and Medicaid Services actuaries found that from 1990 to 2013, productivity growth in the hospital sector averaged between 0.1% and 0.6% per year. In the private (non-farm) business sector, growth averaged 1% per year.
Some analysts argue that health care productivity is increasing in a different sense: i.e., better survival rates, and improved quality of patient life. Medical advances may be more expensive in terms of labor or supplies, but nevertheless are valuable to health care consumers.
According to McKinsey, the health care industry's productivity could be improved by minimizing waste: by optimizing doctors' schedules, for example, or automating some administrative tasks.
