1December 2023Healthcare PracticeMcKinsey on healthcare: Innovate to thriveA selection of articles from 2023McKinsey on healthcare: Innovate to thrive is published by McKinsey’s Healthcare Practice.McKinsey & Company Healthcare Practice 500 Woodward Avenue, Suite 2850 Detroit, MI 48226The mission of McKinsey’s work in the social, healthcare, and public sectors is to help measurably improve lives, livelihoods, and health and create resilient communities around the world.Transforming health systems is an essential part of this mission. We are committed to supporting private and public healthcare leaders to improve the affordability, accessibility, quality, and experience of healthcare.Global leader, Social, Healthcare, and Public Sector Entities Practice: Shubham Singhal Global leader, Healthcare Practice and McKinsey Health Institute: Drew Ungerman Editor: Gwyn Herbein Assistant editor: Julia Anderson Bauer Art director: LEFF External relations: Sharmeen Alam and Anna Dirksen Lead reach and relevance partners: Scott Blackburn and Nikhil Sahni Cover image: -strizh-/Getty Images“Investing in the new era of value-based care,” by Zahy Abou-Atme, Rob Alterman, Gunjan Khanna, and Edward Levine, copyright © 2022 by McKinsey & Company.“The gathering storm: The uncertain future of US healthcare,” by Addie Fleron and Shubham Singhal, copyright © 2022 by McKinsey & Company.Image on pages 12–13: © RapidEye/Getty Images, image on pages 38–39: © Jose A. Bernat Bacete/Getty Images, image on pages 66–67: © ko_orn/Getty Images, image on pages 80–81: © oxygen/Getty ImagesThis publication is not intended to be used as the basis for trading in the shares of any company or for undertaking any other complex or significant financial transaction without consulting appropriate professional advisers. No part of this publication may be copied or redistributed in any form without the prior written consent of McKinsey & Company.Copyright © 2023 McKinsey & Company. All rights reserved.As payers see continued increases in medical costs and accelerating prescription drug costs, this pressure will require health plans to renew focus on medical and administrative cost control. — These cost pressures offer many opportunities for tech-enabled services companies that can show customers near-term return on investment from their products. At the same time, many healthcare services and technology companies without demonstrable return will face severe downside to their businesses. — Higher interest rates and less liquidity in the financial markets have raised the hurdle rate for private equity (PE) and venture capital firms. In these circumstances, private investors must ensure their portfolio companies deliver bottom-line performance, produce organic growth backed by proven business models, and have the ability to make any inorganic growth accretive based on robust capabilities. Large, we...
