12 Healthcare Industry Trends: 2024 Outlook
1. The Healthcare industry is still facing a shortage of physicians and providers to meet growing demand due to an aging population and retiring doctors.
2. Payer entities (insurers) are becoming larger, exerting more negotiating power over healthcare providers, which is affecting reimbursement rates and creating financial challenges for hospitals.
3. UnitedHealthCare with Optum has become the largest employer of doctors, while other disruptors struggle with similar supply problems.
4. Government-funded healthcare programs (Medicare and Medicaid) have grown larger than commercial payer sources, which is posing business concerns for hospitals due to lower payments compared to commercial rates.
5. Technology is playing a role in addressing care gaps, but it's not a complete solution to the supply and demand imbalance.
6. Transition to value-based care is ongoing, but challenges persist with balancing overuse in fee-for-service models and increased pre-authorization in value-based care.
7. Medicare Advantage covers more than half of Medicare beneficiaries which is influenced by political lobbying and overpayment concerns.
8. Mental health demands have surged, and has worsened by a shortage of mental health professionals.
9. Private equity's involvement in healthcare continues to face scrutiny, with concerns about pricing, competition, and care quality.
10. There is growing interest in aging well and preventive health despite the difficulties in institutionalizing these practices.
11. Diabetes/obesity drugs show promise, which is raising questions about healthcare spending and service demands related to weight loss.
12. Hospital margins improved in 2023, but long-term financial challenges persist, especially for rural hospitals at risk of closure due to severe financial problems.