Health Care’s Value Problem—and How to Fix It

BCG October 23, 2017
Stefan Larsson and Peter Tollman

It’s a secret hiding in plain sight. The $7.6 trillion global health care sector has a value problem. Despite decades of efforts to control spending, costs continue to rise at roughly double the rate of GDP growth in most developed countries. That is putting severe pressure on health care budgets and, in many countries, is leading to rationing in the form of longer wait times or restricted access.

It would be one thing if those spending increases were delivering commensurate improvements in patient health. But that is far from the case. There are wide variations in health outcomes across hospitals, regions, and countries, with no clear causal relationship between money invested and health delivered.¹ The systems that spend the most...

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