Healthcare
In a rapidly changing healthcare environment, providers look for new ways to find stability.
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What to Expect in 2024
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What to Expect in 2024
Difficulties hurting Canadian healthcare show little sign of abating: escalating cost pressures, a chronic labour shortage and greater risks to property, reputation and professional status. But it’s not all grim. Healthcare organizations that provide forward-thinking benefits and implement effective risk management will find opportunities to thrive.
Explore our key takeaways to protect your
profits and drive organizational vitality and resilience...
Healthcare will continue its long and difficult fiscal recovery.
It is well-known that hospitals and healthcare providers bore the brunt of the COVID-19 pandemic.
With costs rising and the deferment of elective surgeries, hospitals are struggling in spite of the fact that Canada spends among the most per capita of all the Organization for Economic Cooperation and Development (OECD) countries.
In fact, increased expenditures are a top concern for 68% of Canadian healthcare respondents to the HUB International 2024 Outlook Executive Survey. Higher labour costs are driving expenditures, as is the cost of routine maintenance due to higher supply and equipment costs.
Elevated interest rates also are squeezing margins, as the cost of borrowing affects capital projects like building new facilities or remodeling existing ones and purchasing advanced medical tech. For instance, a new cancer hospital decreased its bed capacity 38% due to a 29% jump in construction costs.
While this happened in the U.S., the issue stretches across borders.
However, issues for Canadian healthcare go beyond expenses. Wait times for non-emergency care remain problematic. And by 2028, the country will be short 44,000 physicians, with family practitioners accounting for nearly three-fourths of the shortage.
Despite the billions of dollars the federal government has promised to revitalize provincial healthcare, 51% of Canadians believe the money will make only a “marginal” difference. At the same time, private health clinics are seeing an increase in patients who want more immediate care.
Canadian healthcare organizations can improve their financial viability by re-evaluating their insurance programs to save on costs, while exploring new opportunities to generate revenue.
Vitality
Resiliency
Preparedness
Preparedness
Resiliency
Economic Viability
Benefits strategy — not AI — will have the biggest potential to help fill staff shortages in 2024.
The healthcare industry is facing a shortfall of nearly 120,000 nurses by 2030 and 44,000 physicians by 2028. Meanwhile, half of Canadians either don’t have a family doctor or can’t get a timely appointment with their physician.
In part, healthcare workers are leaving the field because of respect. In fact, 41% of nurses leaving the profession said they were overworked. This is coupled with wages remaining static in the face of rising inflation.
There’s also the matter of safety in employee recruiting and retention. Nearly two-thirds of healthcare workers have experienced physical violence in the workplace, and fears of safety have driven healthcare workers into other professions.
Although artificial intelligence has been touted as the long-term benefit for labour shortages and shows potential in healthcare, the technology remains in its infancy. All Canadian healthcare
respondents to HUB’s survey ranked training and adding skills as having an impact on employee vitality, more than any other element.
The industry might better heal itself with a humanistic approach to benefits and work policies. More than eight out of 10 of employees want to be seen as individuals, not merely workers, and for their employers to support both their work and personal lives. Delivering personalized benefits that create quality employee experiences (QEX) can be a major factor in boosting recruiting and retention efforts in 2024.
Preparedness
Vitality
Economic Viability
Risk management will be key to success in a challenging environment.
Given the headwinds working against the industry, it will be difficult for healthcare providers to rebuild resiliency.
Some risks are more easily tackled than others. Technology’s role in healthcare, for example, is vitally important for greater efficiency and enhanced patient care. But cyberattacks have skyrocketed: Cybercriminals have unleashed ransomware attacks on more than 400 healthcare organizations in Canada and the United States since 2020, causing closures.
There is good news. For providers, the cost of professional liability coverage is expected to fall. In addition, cyber insurance premiums are likely to level off or have minor rate increases after years of double-digit price hikes.
Guarding against Mother Nature is another matter. As hurricanes, floods, extreme heat and other catastrophic weather events occur with more frequency, business contingency plans are key, but so is sufficient insurance. Property insurance rates
in general are expected to remain flat in 2024, but rates for facilities in catastrophe (CAT) zones will rise.
Because many carriers are limiting capacity or increasing premiums to the point of unaffordability, healthcare providers will want to consider alternate risk vehicles like captives or self-insurance for certain insurance needs, such as property coverage, when appropriate.
Organizations should not expect a single underwriter to cover all their insurance needs in any given coverage line, as healthcare providers often need to access multiple carriers for full coverage.
Resiliency
Vitality
Economic Viability
Disruptions ahead. Are providers ready?
Nearly 60% of Canadian healthcare respondents to HUB’s Outlook Executive Survey conduct enterprise risk management assessments monthly or quarterly, indicating executives understand that preparedness will be important in 2024.
But there is a difference between knowing that preparedness is important and actually being prepared. For example, 68% of the HUB survey’s Canadian healthcare respondents say they are prepared for climate change and severe weather. Yet fewer than half have effective facilities risk management plans.
For hospitals, climate change is a two-pronged risk: They must prepare for weather damage to healthcare facilities and care for patients injured in a severe weather event. No matter if the disaster is a hurricane, wildfire or extreme heat, these events will be costly — the latter alone expected to amount to hundreds of billions in additional healthcare costs before the end of the decade.
Health systems have responded with dashboards listing patients at risk from extreme weather events and have encouraged investment in tree canopies and improved cooling and air filtration in the homes of those at risk.
Organizations are also rethinking construction, rebuilding hospitals and adding barriers to withstand hurricanes and floods, for example.
Healthcare providers need to consult their insurance broker about filling gaps in preparedness, whether it’s for an increasing number of patients, weather-related damage to property, or audit or litigation preparation. If they’re unprepared, they not only risk damage to the bottom line, but their ability to stay operational.
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HUB healthcare insurance, risk management and employee benefits professionals will work with you to develop a tailored strategy that will protect the bottom line, support the vitality of your workforce and build resiliency for 2024.
Here are some initial considerations:
Thoughtfully lean into risk.
Risks in healthcare have increased — and so have premiums. Consider taking a higher deductible, which reduces premiums and improves experience rating, or alternative risk transfer vehicles to lower costs. Ask your broker what kind of insurance strategy meets your risk profile and budget.
Increase engagement through benefits.
Re-emphasize safety.
Understand your loss trends.
Re-emphasize safety.
Understand your loss trends.
Thoughtfully lean into risk.
Employees — especially healthcare workers — expect you to support their health, safety and wellbeing. A benefits strategy based on personalization quality employee experiences (QEX) will boost engagement, recruiting and retention, and lower risk.
Increase engagement through benefits.
In an era of labour shortages, workplace violence against healthcare workers and increased patient litigation, keeping patients and employees safe is essential. Train and onboard employees to understand expectations and commit to maintaining a safe work environment.
Re-emphasize safety.
Thoughtfully lean into risk.
Increase engagement through benefits.
Understand your loss trends.
Understand the root cause of your large losses and explain to carriers what you’re doing to prevent future losses. Develop a strategy with your insurance broker to determine the best time and frequency to review alternative markets.
Understand your loss trends.
Thoughtfully lean into risk.
Increase engagement through benefits.
Re-emphasize safety.
Healthcare
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Download our 2024 Healthcare Outlook and Insurance Market Rate Report to see what to expect in the coming year.
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Dan Nissi
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Jim Burke
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Gigi Acevedo-Parker
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Mona Krolak
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When you partner with HUB, you’re at the centre of a vast network of experts who will help you improve your profitability, enhance the vitality of your workforce and remain resilient into the future. For more information on how to manage your insurance costs, reduce your risk and take care of your employees, talk to a HUB healthcare advisor. We’re here to help.
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1. Results from HUB’s Outlook Executive Survey, which polled 900 C-Suite and VP-level executives on the issues facing them on profitability, employee vitality and organizational resilience.
Economic Viability
Vitality
Resiliency
Preparedness
2
1
1
8
7
12
13
4
2
3
14
16
15
17
14
Be transparent with your broker.
Be transparent with your broker.
Be transparent with your broker.
Be transparent with your broker.
Let your broker know what changes you’ve made to the business, so there are no surprises at renewal. Review exposures and insurance needs at least 90 days prior to policy renewal, so your broker can identify the best options.
Re-emphasize safety.
Increase engagement through benefits.
Thoughtfully lean into risk.
Understand your loss trends.
Be transparent with your broker.
3
5
9
10
11
By 2028, the country
will be short 44,000 physicians, with family practitioners accounting for nearly 75% of the shortage.
For hospitals, climate change is a two-pronged risk: They must prepare for weather damage to healthcare facilities and to care for patients injured in a severe weather event.
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Tim Geddes
Healthcare Practice
Expert
4
6
1. Canadian Institute for Health Information, “National health expenditure trends, 2022 – Snapshot,” November 3, 2022.
2. Becker’s Hospital Review, “3 healthcare capital projects affected by inflationary pressures,” February 17, 2023.
3. National Post, “Why Canada’s hospital capacity was so easily overwhelmed by the COVID pandemic,” January 17, 2022.
4. RBC, “Canada needs more doctors—and fast,” November 23, 2022.
5. Angus Reid, “After a ‘decade of decline’ in health care, Canadians not convinced that money is enough to solve the crisis,” August 17, 2023.
6. CTV News, “Privatized health clinics see increase in patients fed up with wait times in public system,” September 7, 2023.
7. Canadian Nurse, “Solutions to tackle the nursing shortage and burnout immediately: a review of the literature,” April 17, 2023.
8. CBC, “As Canada grapples with a doctor shortage, Ottawa announces immigration stream for health workers,” June 28, 2023.
9. Angus Reid, “Doc Deficits: Half of Canadians either can’t find a doctor or can’t get a timely appointment with the one they have,” September 8, 2022.
10. Statistics Canada, “Quality of employment and labour market dynamics of healthcare workers during the COVID-19 pandemic,” August 10, 2023.
11. Canadian Occupational Safety Magazine, “Hospital staff subjected to increasing violence: Report,” July 19, 2022.
12. National Library of Medicine, “Evaluation of artificial intelligence techniques in disease diagnosis and prediction,” January 30, 2023.
13. HR Today, “Rethinking EVP,” June 11, 2021.
14. Canadian Centre for Cyber Security, “National Cyber Threat Assessment 2023-2024,” 2022.
15. Global News, “Cost of future extreme heat events high for humans and the B.C. economy: report” July 7, 2023.
16. The Commonwealth Fund, “How Health Care Organizations Are Preparing for Climate Shocks and Protecting Vulnerable Patients,” October 20, 2022.
17. Health Facilities Management, “Building hospitals that can withstand extreme weather events,” August 24, 2022.
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