Health system leaders are expecting multiple intersecting challenges in 2023 healthcare decisions in 2023 to be defined by eight themes across four areas including regulatory, financial, technological and supply chain considerations, according CommerceHealthcare's Healthcare Finance Trends for 2023 report.
The report includes a research analysis combined with practice experience, CommerceHealthcare said.
Eight financial trends that will drive health system decisions:
1. Financial stress points will limit options. Complex and multifaceted issues including rising acuity levels, reimbursement gaps and sagging investment activity are threatening the industry's traditional status as "recession-proof." Citing $450 billion of EBITDA that could be in jeopardy, more than half of the industry’s projected profit pool by 2027, one analyst suggested "a gathering storm."
Inpatient days are projected to increase at an 8 percent rate over the coming decade, while the hospital employee expense is expected to increase $57 billion from 2021 to 2022, with contract labor ballooning another $29 billion.
2. Outpatient, virtual and acute home care settings will be the most conducive to growth. While only 4 percent of surveyed top executives consider their organization proficient at implementing remote care, hospital and health system leaders continue to pivot to these settings to diversify their revenue streams. Sixty-three percent of physicians worldwide expect most consultations to be performed remotely within 10 years. About 40 percent of health centers are using remote patient monitoring today.
Patients see it favorably, too: 94 percent definitely or probably will use telehealth again, 57 percent prefer it for regular mental health visits and 61 percent use it for convenient care.
3. Patients and other stakeholders are increasingly interested in a flexible patient financial experience. Sixty-one percent of consumers said that ease of making payments is important in decisions to continue seeing a physician. More than half of patients said text message reminders make them more likely to pay a bill faster than usual, and 35 percent of respondents "have changed or would change healthcare providers to get a better digital patient administrative experience."
A leading forecaster sees 65 percent of patients engaging services via digital front doors by 2023, according to the report.
4. Growing demand for patient financing. Twenty-eight percent of Americans now describe themselves as less prepared than last year to pay for routine or unanticipated care, which means emphasizing patient financing as part of the overall experience is even more important.
Insurance premiums have steadily risen for both the insured and their employers, and employees now pay more than $6,000 annually on average for family coverage. High deductible health plans place a heavy burden on the patient, and through 2021, 28 percent of workers were enrolled in an HDHP with an average family deductible of $4,705.46 Employer satisfaction with these plans is high, however, meaning expansions in these offerings could be in store for the future.
5. Building trust is becoming a critical success factor. Trust will always be important in healthcare, and the hit it took during the pandemic has yet to be fully recovered. The public wants and expects to be able to trust healthcare professionals to protect data and transactions. Between April 2020 and December 2021, the percentage of Americans who trusted information from doctors "a great deal" dropped by 23 percent, from hospitals 21 percent and from nurses 16 percent.
One strategy for bolstering trust is relying on fewer business partners. Many health systems, hospitals and practices are reducing their number of vendors to focus on trusted long-term partners. Almost two-thirds of surveyed providers said they wanted to streamline the number of software solutions over the next year.
6. Cybersecurity in 2023: no rest for the weary. Compromised data and ransomware attacks continue to plage the industry. Beyond a host of management and monitoring tools being deployed, a strategic philosophy is rapidly gaining ground. The “zero trust” model is quickly becoming popular as a cybersecurity strategy. It "denies access to applications and data by default," and 58 percent of hospitals and health systems have a zero trust initiative in place. Another 37% intend to implement one within 12 to 18 months.
Cybersecurity investment will challenge CFOs in 2023. Cybersecurity worker availability is estimated to satisfy only 68 percent of open positions.
7. Digital transformation of finance in focus. Digital transformation is fundamental to healthcare’s business and care delivery model changes.According to a recent survey, 94 percent of CFOs and senior leaders stated those efforts will be at the forefront of financial operations and strategy for 2023–2024, and 79 percent described it as an "absolute need."
However, there are still too many tools and applications. A survey of top decision-makers at health systems found that 60 percent use more than 50 software solutions just in operations (24 percent have over 150). System integration is one answer, the report said. Application programming interfaces help tremendously. API-first is fast becoming the norm, with global API investment expected to nearly triple by 2030.
8. Digital payment diversity is on the horizon. New digital payment modes will catalyze the transformation of finance, with an expected annual growth in healthcare of almost 23 percent. Notable technologies and payment modes expected to cross over from consumer markets to healthcare include mobile, real-time payments, "buy now, pay later" and earned wage access. There is a wide range of potential provider benefits from finding the right use cases for these payment technologies.
ACH payments have been on a strong upward trajectory in healthcare for several years. In 2021, ACH tallied a yearly increase of 18 percent in volume and 5 percent in dollars.