McKinsey: AI Could Reverse 25 Years of Flat Healthcare Productivity
A Nov. 11 McKinsey & Co. report finds U.S. healthcare delivery productivity declined about 1% from 1998 to 2023, while other service industries gained 56%, and fell roughly 1% annually from 2019 to 2025 versus 2% annual growth in the broader private economy. McKinsey cites early evidence that AI is cutting administrative workloads, including a study of 7,260 physicians that found ambient AI documentation saved an estimated 15,791 hours. In a 2026 McKinsey survey of 120 healthcare leaders, 92% reported implementing or piloting generative AI, but only 38% of those with generative AI in place reported measurable positive ROI. McKinsey projects healthcare services and technology revenue will grow 7-8% annually through 2030 and estimates AI-driven productivity gains could add up to 100 basis points of provider margin improvement, while cautioning that ACA subsidy expiration and other federal policy changes could cut hospital EBITDA margins by about 80 basis points through 2027.