By 2027, inflation could have a major impact on national health expenditures (NHE). According to a new report from McKinsey & Company, NHE could rise by as much as $370 billion over baseline levels by 2027 due to inflation, and COVID could further add as much as $222 billion in NHE. Over time, this could cause a crisis of affordability for consumers and limit profitability for providers, according to the report.
Previously, national health expenditures were expected to grow 5.5% through 2027. Now, that number has risen to an estimated 6.8%, which is 2.5% over estimated GDP growth. Among the causes for the increase include higher labor costs, the biggest contributor to increasing prices.
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