12 Healthcare Industry Trends: 2024 Outlook
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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.
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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.
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3. UnitedHealthCare with Optum has become the largest employer of doctors, while other disruptors struggle with similar supply problems.
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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.
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5. Technology is playing a role in addressing care gaps, but it's not a complete solution to the supply and demand imbalance.
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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.
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7. Medicare Advantage covers more than half of Medicare beneficiaries which is influenced by political lobbying and overpayment concerns.
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8. Mental health demands have surged, and has worsened by a shortage of mental health professionals.
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9. Private equity's involvement in healthcare continues to face scrutiny, with concerns about pricing, competition, and care quality.
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10. There is growing interest in aging well and preventive health despite the difficulties in institutionalizing these practices.
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11. Diabetes/obesity drugs show promise, which is raising questions about healthcare spending and service demands related to weight loss.
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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.