May 23, 2021

Healthcare's low Digitization Index


Healthcare is one of the least digitized sectors of the economy. A comparison to other sectors of the economy in the USA & Europe.

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In 2015 McKinsey Global Institute published a series of tables that ranked sectors of the economy according to a "Digitization Index." (Digital America: A tale of the haves and have-mores - December 1, 2015 Article link)

It is no surprise, but healthcare ranked right in the bottom quarter of the list regarding overall digitization.

McKinsey 2015

Detailed breakdown

To create this qualitative metric, McKinsey evaluated how each sector was spending on digital:

  • Assets: such as hardware, software, and equipment
  • Usage: in the transaction, interactions, and business processes
  • Labour: digital spending per worker and digital employment

Europe's digitization index is also low

A report was published for Europe in 2016, which showed similar results (McKinsey Digital Europe: Realizing the continent’s potential - June 29, 2016 Article Link). Healthcare ranked near the bottom of the economy in terms of digitization.

Productivity & Digitization Index

The first table in this article also includes a column indicating productivity growth for each sector from 2005-2014. In general, many of the most productive sectors have high digitization. A low digitization index is found more often in sectors of the economy with lower productivity growth.

What does this mean for healthcare? One explanation for healthcare's low productivity growth over the last decade can be attributed to its low digitization.

In a world where fax machines remain the norm, it is no surprise that healthcare's digitization index is low. Bringing good information technology and digitization to healthcare is one of the only ways that we will be able to curtail the rising annual costs of delivering healthcare.

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