Archives

Provider Consolidation, Bankruptcies & Closures

The looming recession, new competitive entrants, and continued financial constraints will increase M&A activity across the provider landscape, hospital bankruptcies, and closures of rural hospitals. Providers will have to address potential risks and trigger a financial sustainability strategy to stay afloat.

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Cost Cutting Strategies

As a result of the economic downturn, employers and providers will implement cost cutting strategies. Employers will look to reduce employee benefit plans and direct contracting opportunities. Providers will cut costs to adjust for supply chain cost increases and declining cash on hand.

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Reduced Discretionary Spending

While consumer demand for proactive, personalized care is high, household discretionary spending on healthcare will slow. Organizations will need to provide more innovative, high-value solutions to earn consumers' dollar.

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Digital Consolidation

The influx of private equity funding has led to an overwhelming number of point solutions built to solve the same problem(s). 2023 will see these digital point solutions consolidate capabilities, increasing the breadth and depth of their offerings.

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Health Equity & SDoH

Reducing/addressing healthcare disparities across underserved populations continues to be a top priority, especially with the ACO REACH program. Value-based care networks must continue integrating with community-based organizations that can share SDoH and other data, offer services, and coordinate care. Providers and payers will continue to enhance their SDoH solutions to improve health outcomes and reduce healthcare costs.

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Labor & Workforce Shortages

A McKinsey report found labor shortages and labor costs will be main drivers of the anticipated $370B increase in healthcare spending by 2027. Staffing shortages among nurses, primary care physicians, mental health providers, and rising labor costs will continue to fuel the healthcare affordability problem in 2023 and beyond.

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Increase in Uninsured/Underinsured Patients

As many as 18M people could lose coverage under Medicaid in the 14 months after the public health emergency ends if it expires in April 2023. The increase in uninsured and/or underinsured patients will drive up costs for providers and have devastating effects on the health of the population.

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Private Equity Investment

Due to pressures on federal and state funding and competition for public dollars, private investment in healthcare will quickly become the industry's primary source of capital for growth and innovation. In 2023, private equity firms will continue to invest in healthcare companies that deliver new solutions for today's challenges.

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