Healthcare leaders prioritize financial measures to confront market dynamics
Research surfaces how healthcare leaders are responding to changing market and industry dynamics
To get a pulse on where leaders are focusing their efforts and what trends they’re watching, Huron surveyed 300 healthcare executives across the U.S.
Top 10 healthcare trends:
A focus on financial growth and stability
The top three trends that surface today and in the near term all relate to financial management — a shift from last year’s predominant focus on care delivery.
Top Trends
This year
Redefining portfolio
Cost reduction/optimization
Price increase/optimization
Data management and analytics
Technology infrastructure
Care delivery
1.
2.
3.
4.
5.
6.
(physical care facilities and health communities)
(acute care in the home, telehealth, and remote patient monitoring)
Consumerism
Care access transformation
Ambulatory care expansion
Virtual care delivery
7.
8.
9.
10.
Redefining portfolio
Price increase/optimization
Cost reduction/optimization
Technology infrastructure
Care access transformation
Value-based care
Care delivery
1.
2.
3.
4.
5.
6.
7.
(physical care facilities and health communities)
Virtual care delivery
8.
Revenue growth
Consumerism
(acute care in the home, telehealth, and remote patient monitoring)
9.
10.
*Bold = new trend emergence
3-5 years
IMAGE
People in a financial setting
Top 10 healthcare challenges:
Cost is No. 1
In alignment with emerging trends, healthcare leaders indicate financial challenges are their biggest hurdle. Consumerism, workforce shortages, and interoperability are also seen as growing challenges.
Hover to view YOY Change
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Cost reduction/optimization
36%
50%
+
Price increase/optimization
34%
*No data for 2022
Redefining portfolio/changing healthcare business model
33%
43%
+
Addressing consumerism
28%
40%
+
Value-based care
25%
9%
+
Managing health system capacity
25%
4%
+
Workforce shortages
24%
26%
+
Interoperability of systems (EHR/ERP)
24%
41%
+
Finding the right mix of inpatient and outpatient services
24%
4%
+
Changing our care delivery model
24%
22%
-
(i.e., physical care facilities and health communities)
Top 5 financial pressures
A closer look
To better understand industrywide cost and price challenges, healthcare leaders were asked to rate the impact of financial pressures on their organization. Rising labor costs emerged as the top financial pressure.
As organizations face heightened cost pressures, healthcare executives rank financial metrics as the most important evaluation method for prioritizing investments to address critical challenges. This marks a shift away from social metrics, such as patient experience and community impact, identified by leaders in 2022.
Read more
How healthcare leaders prioritize business decisions to tackle widespread financial challenges is crucial to improving an organization’s bottom line and enabling leaders to reinvest in their people and businesses. Reaching an ideal financial state where cost and revenue performance are optimized will involve balancing cost take-out with yield improvements. Enhancing core functions such as revenue cycle and supply chain along with strategic partnerships will be important levers to support financial improvements and gain efficiencies.
Rising
labor
costs
1
2
Pricing optimization
High cost of capital
3
Supply chain and vendor
costs
4
Revenue cycle management
5
How are healthcare organizations addressing trends and challenges?
Healthcare executives indicate a multifaceted approach is needed to tackle the diverse mix of emerging trends and challenges they’re facing. Planned initiatives and investments are anchored by four core actions:
1
Investing in digital tools, technology, and analytics
Healthcare organizations indicate a growing prioritization of digital initiatives...
+
2
Evolving talent and workforce strategies
With workforce shortages identified as a top challenge and rising labor costs as the...
+
3
Advancing care delivery and health equity
As healthcare organizations strive to meet consumer needs and preferences and...
+
4
Optimizing operations and business models
Pressure to grow while simultaneously reducing costs is forcing healthcare leaders...
+
Investing in digital tools, technology, and analytics
Healthcare organizations indicate a growing prioritization of digital initiatives to drive cost savings and strategic growth.
+
Among top five planned cost-saving measures: Rationalizing applications and licenses and improving interoperability.
•
Strategic growth areas: Technology-enabled care and data management and analytical decision-making.
Leaders continue to invest in artificial intelligence, machine learning, and automation to realize efficiency and cost-saving goals and improve the patient and employee experience.
•
Digital-first approach:
What it means and why it matters
Digital-first organizations bring technology and corporate culture together to improve processes, maximize efficiencies, and offer unparalleled customer experience. By combining a digital mindset with a mature digital strategy, organizations can benefit through their ability to be agile, respond quickly to shifts in the market, and remain financially viable amid volatility.
of healthcare executives are investing in digital tools to address emerging trends, more than double than in 2022.
28%
of healthcare leaders anticipate rationalizing applications and licenses as the No. 2 cost-saving measure.
42%
Evolving talent and workforce strategies
With workforce shortages identified as a top challenge and rising labor costs as the greatest financial pressure, healthcare organizations are turning their attention to workforce redesign to alleviate turnover and attract talent.
+
Planned initiatives: Restructuring the company and senior leadership, investing in talent, and rethinking workforce strategies, such as flexible staffing and remote work.
•
Virtual care is a primary focus area for recruitment and retention as leaders plan to expand offerings and reduce burnout. Leaders cite staffing the virtual care model as their most pressing telehealth priority, along with reimbursement.
•
Digital-first approach:
Tools to enable engagement and retention
Leading organizations are investing in digital tools for healthcare workers to optimize workflows and improve the employee experience. Automated documentation and ordering, care coordination tools, ambient clinical intelligence, and technologies that enable remote working capabilities are among leaders’ planned digital investments.
of healthcare organizations are considering restructuring the company and senior leadership to adapt to industry changes.
28%
of healthcare leaders cite staffing recruitment and retention as a top growth priority.
66%
Advancing care delivery and health equity
As healthcare organizations strive to meet consumer needs and preferences and move toward value-based care models to improve patient outcomes, leaders are rethinking how they deliver care and engage with patients.
+
Three of the top 10 growth priorities identified by leaders are care- and consumer-focused: Improving consumer engagement and retention, ambulatory expansion planning, and integrating care delivery models across the continuum.
•
Other high-priority investment areas: Care access and social determinants of health (SDOH).
•
Digital-first approach:
Tools to enable better care and patient outcomes
Digital-first organizations recognize that digital investments will underpin how they transform care delivery and care for their patients. Digitally mature organizations are prioritizing investments in customer relationship management (CRM) platforms, population health tools, predictive analytics, real-time data analysis, and consumer-facing digital apps and tools.
of healthcare executives consider SDOH a high priority and plan to invest in the next 3 years, up from 67% in 2022.
90%
Provide financial/insurance outreach services
60%
37%
Contract with minority-owned businesses
40%
15%
Ensure equity of vaccine distribution through mass vaccination sites in lower income communities
39%
35%
Establish partnerships to deliver transportation to appointments
36%
38%
Improve patient access to digital health offerings
34%
42%
Top intiatives to address SDOH
2023
2022
Optimizing operations and business models
Pressure to grow while simultaneously reducing costs is forcing healthcare leaders to strategically rethink how their organizations operate.
+
Redefining portfolio surfaced as the top trend, cost-saving measure, and strategic growth priority.
•
Other planned initiatives to enable operational improvement and organizational growth:
• Rethinking business models
• Reducing capital expenditures
• Increasing reimbursement accuracy
• Optimizing supply chain management
• Merger, acquisition, and partnership opportunities
•
Digital-first approach:
Tools to enable strategic decision-making and operational efficiency
Redefining portfolios and reconfiguring business models require streamlined data that provide a single source of truth for strategic decision-making. Huron’s research finds that 88% of digitally mature organizations are investing in data sharing, management, and governance. Nearly all are investing in core technology and interoperability, including ERP platforms. Leading healthcare organizations are also leveraging competitive market insights to evaluate their portfolios and identify growth opportunities.
of healthcare executives consider redefining portfolio a high growth priority and about half view it as a top cost-saving measure.
80%
of organizations plan to focus on increasing reimbursement accuracy and improving clinical documentation to improve margins.
37%
•
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Healthcare trends
The No. 1 hurdle
Top 5 financial pressures
How leaders are responding
Inside the report
The research surfaces how healthcare leaders are positioning their organizations to solve complex financial challenges while igniting growth.
Huron's survey includes leaders across five functional areas:
Strategy and innovation
Finance and operations
Clinical care
Technology
People
+
Healthcare Market Research
4.
5.
6.
7.
8.
and health communities)
9.
10.