Health system leaders are expecting healthcare decisions in 2023 to be defined by staffing challenges, inflation, patient affordability, shrinking margins and supply chain struggles, according to a recent Deloitte Center for Health Solutions survey.
Four financial trends that will drive health system decisions:
Inflation and affordability.
Only 7 percent of respondents to the Deloitte survey said inflation and affordability issues would probably not weigh on their 2023 strategy, while 76 percent thought it would weigh heavily. Rising living expenses could push some to delay routine and preventive care, which could exacerbate health issues and lead to more high-cost medical expenses in the future.
Digital transformation.
The cost of capital may complicate modernization and digital transformation attempts for healthcare organizations. Just 29 percent of health system respondents said accelerated digital transformation would likely have a major impact on their strategy in 2023, while 63 percent thought it would have a moderate effect. Health plan executives, however, indicated that they expect accelerated digital transformation have a "great impact" (43 percent) or a "moderate impact" (50 percent) in 2023.
Shrinking margins.
Many systems are still bouncing back from pandemic-related low patient volume and revenue shortfalls. Costs for supplies and labor are rising, meaning that 2022 might end up being a historically bad financial year for hospitals. Even three years after the pandemic began, many patients are still delaying non-emergency procedures, which continues to squeeze revenue. More are moving to ambulatory centers over hospitals for surgeries. Hospitals and health systems saw median operating margins drop 46 percent in September compared to the same month in 2021.
New payment models and alternative sites of care.
Moving to new payment models like value-based care was considered a top priority among health plan executives surveyed for 2023. Many are likely to enter the new year in a strong financial position due to fewer claims in 2022. Hospitals and health systems, however, will focus more on slowing the flow of red ink in 2023. That could make it difficult for health plans to transition their network providers into new payment models.