McKinsey Finds U.S. Healthcare Productivity Stalled

A new McKinsey report says healthcare delivery output per worker has barely moved in 25 years while other service industries surged.

Updated on Nov. 12, 2026 in Healthcare

Bold flat-color editorial illustration of identical stacked instrument trays in navy and cream with one red accent, rising to a stalled horizontal line. — McKinsey says U.S. healthcare delivery output per worker fell about 1% from 1998 to 2023 while other service industries rose 56%. AI Illustration. Upload story photo >

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McKinsey & Co. published a report stating that real gross output per full-time-equivalent employee in U.S. healthcare delivery declined about 1% between 1998 and 2023. Over the same period, other service industries rose 56%, and healthcare delivery productivity fell roughly 1% annually from 2019 to 2025.

Why it matters

The gap underscores pressure on hospitals and clinics to find efficiency gains as costs rise and staffing strains persist across the United States. McKinsey points to artificial intelligence as an emerging tool for reducing administrative workloads and generating financial returns.

Healthcare delivery productivity fell about 1% annually from 2019 to 2025, compared with 2% annual growth across the broader private economy. McKinsey's projections for healthcare services and technology revenue growth of 7% to 8% annually through 2030 remain unverified forecasts.

The players

McKinsey & Co.

McKinsey & Company is a global management consulting firm that publishes widely cited research on health care, technology and productivity across industries.

The details

McKinsey's analysis found that a study in NEJM Catalyst Innovations in Care Delivery examined ambient AI documentation used by 7,260 physicians across about 2.6 million patient encounters and estimated 15,791 hours of documentation time saved compared with nonusers. In its 2026 survey of 120 decision-makers, 92% reported implementing generative AI or pursuing proofs of concept, while 38% of the 111 leaders with implemented tools reported measurable positive returns.

1998 to 2023: Healthcare delivery productivity declined about 1% while other service industries rose 56%.
March 2025: NEJM Catalyst study on ambient AI documentation was published.
2019 to 2025: Healthcare delivery productivity fell about 1% annually.
2026: McKinsey surveyed 120 healthcare decision-makers.
Through 2030: McKinsey projects healthcare services and technology revenue growth of 7% to 8% annually.

Roadmap

McKinsey's productivity analysis of U.S. healthcare, drawing on Bureau of Economic Analysis and Bureau of Labor Statistics figures, shows delivery output per worker falling as other service sectors grew sharply. The new AI findings extend that research by projecting that automation could slow revenue growth at traditional administrative outsourcing firms by two to three percentage points annually.

For patients, the productivity gap can show up as longer waits and rising administrative billing costs, though the report does not quantify these effects for individuals. Clinicians and staff may see documentation burdens change as ambient AI tools spread, depending on how individual health systems adopt them.

The takeaway

Health systems looking to improve productivity should evaluate AI documentation and workflow tools against measurable time savings, since McKinsey's survey shows that only about 38% of adopters have reported clear returns so far.