Health industry profits projected to rise by $31 billion between 2021 and 2025

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Health industry profits projected to rise by $31 billion between 2021 and 2025
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Health care profits will rise significantly over the next few years, according to a new McKinsey & Company estimate.

Why it matters:

Every dollar in profits is a dollar spent by someone else — whether that's individual patients, employers or taxpayers.Higher profits don't necessarily mean higher overall spending , and trends vary significantly within and between sectors.McKinsey analysts predict that earnings before interest, taxes, depreciation and amortization will rise by 6% a year between 2021 and 2025, translating into an addition $31 billion in health industry profits.

Earnings grew by 5% between 2017 and 2019, but remained flat in 2020 and 2021 during the height of the pandemic.The analysts cautioned that profits could decline by more than $70 billion during the 2021-2025 period "if inflation continues unchecked.

An aging population will mean more chronic conditions and higher demand for care — a trend the pandemic likely exacerbated.

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