Deloitte: Healthcare Spending Will Hit $8.3T by 2040

By 2040, 60% of healthcare spending will go to improving health and well-being, according to Deloitte.

Healthcare spending will reach $8.3 trillion by 2040, according to a Deloitte report released Monday morning.

While government projections for healthcare spending center around growth at 5.3% per year, Deloitte predicted a $3.5 trillion difference of freed up healthcare spending or a "well-being dividend" as the report stated.

Deloitte attributed the projected rise in healthcare spending to the anticipated increase in "digital technologies including real-time biometric sensing, apps, wearables, and digital nudging."

Related: Healthcare Spending at 20% of GDP? That's an Economy-Wide Problem

By 2040, 60% of healthcare spending will go to improving health and well-being, according to Deloitte, as activities related to health and well-being are expected to account for around two-thirds of spending. 

"We anticipate that emerging technologies, an ability to cure and prevent disease (or detect disease in the earliest stages), and highly engaged consumers will lead to a deceleration of health spending between now and 2040," the report stated. "While our actuarial models are based on pre-pandemic data, we anticipate spending growth will continue to decelerate."

According to the most recently available data from the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS), U.S. healthcare spending hit $3.8 trillion in 2019, growing 4.6%.

Related: U.S. Healthcare Spending Grew 4.6% in 2019, Hit $3.8T

The Deloitte report broke down how its projections are likely to impact various healthcare stakeholders.

• Industry participants:
  • The report stated that "clear winners and losers" will emerge, namely around the ability to evolve an existing business model and make investments that empower consumers.
  • "Organizational leaders should rethink their capital investment strategies, examine the workforce needs of the future, and reframe regulatory requirements from a compliance function into potential market opportunities," the report stated.
• New entrants:
  • Non-traditional players, specifically technology and retails companies, have opportunities to make inroads in a changing industry.
  • The barriers to entry have been lowered due to regulatory policies that promote "increased  data sharing, transparency, and interoperability."
• Government:
  • The report encouraged lawmakers to support policies that ensure the healthcare system reaches the future quickly.
  • "Government and policy leaders should anticipate and respond to regulations and requirements that keep up with technological advancements and new consumer expectations," the report stated.
• Consumers:
  • Consumerism continues to be a defining force in the evolution of care delivery, the report found.
  • Deloitte indicated that consumers will be a driver for more personalized care options, such as for behavioral health or the social determinants of health. 

While Deloitte released projections for long-term healthcare spending patterns, the medical cost trend is expected to rise again in the short-term.

A survey released by PricewaterhouseCoopers last summer estimated that the medical cost trend for 2021 would be between 4% to 10%.

Related: Medical Cost Trend Could Hit 10% in 2021