Healthcare 2030.

Khang T. Vuong, MHA
Khang T. Vuong, MHA20 Dec 2020
Reviewed and Fact Checked ✔️

Every year, all of us healthcare "people" gather in San Francisco - arguably during the most expensive week to get a hotel in the city.

The average hotel rate for San Francisco from January 13 - 16 this year jumped to $500-$3000 around Union Square area, where the conference is happening.

SF hotel rates during JPM 2020 conference

This year is a little bit special. U.S. Healthcare is now near 20% of US GDP.

And, if you take healthcare out of the U.S. economy, it would be the 5th largest country growing as fast as China. So one may ask: what's so bad about it? Isn't that a good thing?

Just like hotel prices during JPM week, what's happening to healthcare?


Healthcare outpaced economic growth overall in the U.S.

While the economy has been growing at a sub-three percent rate, healthcare spending grew at a 5-6% during the three years leading to 2016.
The Peterson Foundation, a bipartisan think tank, is estimating that healthcare will continue to outpace the economy as a whole in the next 7 years.


Hotel prices are driven by supply-demand. What drove healthcare costs?

First, here are a few things that do not make much sense if you put them together:

  • Healthcare costs seem to keep going up (we all acknowledge that)
  • Hospitals, where the bulk of healthcare utilizations concentrate, only incur less than 3-4% in operating margin
  • Insurers, take Blue Cross Blue Shield plans, for instance, have a relatively high operating margin (in the mid-teens), but barely exceed single digit in term of net profit
  • Patients saw a 160%+ increase in deductible, 6 times faster than wage growth in the past ten years
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Khang T. Vuong, MHA

Khang T. Vuong received his Master of Healthcare Administration from the Milken Institute School of Public Health at the George Washington University. He was named Forbes Healthcare 2021 30 under 30. Vuong spoke at Stanford Medicine X, HIMSS conference, and served as a Fellow at the Bon Secours Health System.

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