Healthcare industry

The healthcare industry (also called the medical industry or health economy) is an aggregation and integration of sectors within the economic system that provides goods and services to treat patients with curative, preventive, rehabilitative, and palliative care. It encompasses the creation and commercialization of products and services conducive to the preservation and restoration of well-being. The contemporary healthcare sector comprises three fundamental facets, namely services, products, and finance. It can be further subdivided into numerous sectors and categories and relies on interdisciplinary teams of highly skilled professionals and paraprofessionals to address the healthcare requirements of both individuals and communities. The healthcare industry is one of the world's largest and fastest-growing industries. Consuming over 10 percent of gross domestic product (GDP) of most developed nations, health care can form an enormous part of a country's economy. U.S. healthcare spending grew 2.7 percent in 2021, reaching $4.3 trillion or $12,914 per person. As a share of the nation's Gross Domestic Product, health spending accounted for 18.3 percent. The per capita expenditure on health and pharmaceuticals in OECD countries has steadily grown from a couple of hundred in the 1970s to an average of US$4'000 per year in current purchasing power parities.

Backgrounds For the purpose of finance and management, the healthcare industry is typically divided into several areas. As a basic framework for defining the sector, the United Nations International Standard Industrial Classification (ISIC) categorizes the healthcare industry as generally consisting of:

Hospital activities; Medical and dental practice activities; "Other human health activities". This third class involves activities of or under the supervision of, nurses, midwives, physiotherapists, scientific or diagnostic laboratories, pathology clinics, residential health facilities, or other allied health professions, e.g. in the field of optometry, hydrotherapy, medical massage, yoga therapy, music therapy, occupational therapy, speech therapy, chiropody, homoeopathy, chiropractic, acupuncture, etc. The Global Industry Classification Standard and the Industry Classification Benchmark further distinguish the industry into two main groups:

healthcare equipment and services; and pharmaceuticals, biotechnology and related life sciences. The healthcare equipment and services group consists of companies and entities that provide medical equipment, medical supplies, and healthcare services, such as hospitals, home healthcare providers, and nursing homes. The latter listed industry group includes companies that produce biotechnology, pharmaceuticals, and miscellaneous scientific services. Other approaches to defining the scope of the healthcare industry tend to adopt a broader definition, also including other key actions related to health, such as education and training of health professionals, regulation and management of health services delivery, provision of traditional and complementary medicines, and administration of health insurance., chiropractic, acupuncture, etc.

Providers and professionals

A healthcare provider is an institution (such as a hospital or clinic) or person (such as a physician, nurse, allied health professional or community health worker) that provides preventive, curative, promotional, rehabilitative or palliative care services in a systematic way to individuals, families or communities. The World Health Organization estimates there are 9.2 million physicians, 19.4 million nurses and midwives, 1.9 million dentists and other dentistry personnel, 2.6 million pharmacists and other pharmaceutical personnel, and over 1.3 million community health workers worldwide, making the health care industry one of the largest segments of the workforce. The medical industry is also supported by many professions that do not directly provide health care itself, but are part of the management and support of the health care system. The incomes of managers and administrators, underwriters, and medical malpractice attorneys, marketers, investors, and shareholders of for-profit services, all are attributable to health care costs. Many healthcare providers outsource non-clinical and revenue cycle functions such as medical billing, claims processing, and denial management to business process outsourcing (BPO) companies. In 2025, several firms were recognized by Clutch as among the top medical billing providers for their compliance with HIPAA standards and strong client satisfaction ratings. In 2017, healthcare costs paid to hospitals, physicians, nursing homes, diagnostic laboratories, pharmacies, medical device manufacturers, and other components of the healthcare system, consumed 17.9 percent of the gross domestic product (GDP) of the United States, the largest of any country in the world. It is expected that the health share of the Gross domestic product (GDP) will continue its upward trend, reaching 19.9 percent of GDP by 2025. In 2001, for the OECD countries the average was 8.4 percent with the United States (13.9%), Switzerland (10.9%), and Germany (10.7%) being the top three. US health care expenditures totaled US$2.2 trillion in 2006. According to Health Affairs, US$7,498 be spent on every woman, man and child in the United States in 2007, 20 percent of all spending. Costs are projected to increase to $12,782 by 2016. The government does not ensure all-inclusive health care to every one of its residents. However, certain freely supported healthcare programs help to accommodate a portion of people who are elderly, disabled, or poor. Elected law guarantees community to crisis benefits paying little respect to the capacity to pay. Those without health protection scope are relied upon to pay secretly for therapeutic administrations. Health protection is costly and hospital expenses are overwhelmingly the most well-known explanation behind individual liquidation in the United States.

Spending

Expand the OECD charts below to see the breakdown:

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