Challenges & Trends

Today’s healthcare horizon is not without challenges. HSI thought leaders and experts embrace these challenges knowing the possibilities for improvement are limitless. We address these opportunities from all levels and angles. Based on scientific data and expert contributions, we are creating solutions to improve healthcare management, spending, resource utilization, risk management, and increase the safety and quality of patient care.

The Organization for Economic Co-operation and Development (OECD) is an intergovernmental organization with 38 member countries. In the publication Health at a Glance 2023, they report health spending data that raises cause for concern in the United States. U.S. healthcare expenditure is three times the OECD average. In 2019, overall spending on healthcare in the U.S. was estimated to be the equivalent of more than $12,000 for each US resident. This amount was higher than all other OECD countries by a significant margin. This is an estimated 17% of the US GDP, well above the 8.8% average of other OECD countries.

A 2021 report from the World Health Organization states that global spending on health has doubled in real terms over the past two decades, reaching $8.5 trillion in 2019 and 9.8% of GDP (up from 8.5% in 2000). High income countries accounted for nearly 80% of global spending on health, with the U.S. alone accounting for more than 40%. Finally, according to the US Center for Medicare & Medicaid Services, “national health spending is projected to grow at an average rate of 5.4 percent for 2019 – 2028 and to reach $6.2 trillion by 2028.”

Despite remarkable levels of healthcare spending in the U.S., there is little evidence of better health outcomes when compared to its counterparts. The U.S. reports a lower life expectancy and worse avoidable mortality rates than the OECD average. There is no doubt that healthcare management strategies to improve financial efficiency are needed and must encompass sustainable, effective, innovative ways to increase the quality, outcomes and accessibility of care.  Our current system of fractured, non-standardized healthcare operations is not defensible or sustainable.

Healthcare spending is not the only area requiring new ways of thinking and acting. The World Health Organization predicts a “shortfall of 18 million health workers by 2030, mostly in low- and lower-middle income countries.” They warn that “countries at all levels of socioeconomic development face, to varying degrees, difficulties in the education, employment, deployment, retention, and performance of their workforce.” The American Hospital Association projects that “America will face a shortage of up to 124,000 physicians by 2033, and will need to hire at least 200,000 nurses per year to meet the demand and replace retiring nurses.” Additionally, it is common knowledge that we have forecasted physician shortage as well.  We expect to have fewer physicians in the specialties we need to improve overall population health to cover our underserved areas.  Innovation will be essential to help manage this upcoming crisis.

Payer systems are yet another area of healthcare management facing challenges and new opportunities. The Centers for Medicare & Medicaid Services and other payer organizations have embraced  value-based programs, which reward healthcare providers and health organizations on the quality of care provided, not just the quantity. Examples of value-based programs include: hospital-acquired conditions, readmission reduction programs, and home health value-based programs. Value-based programs often require the collection of data to determine obtainment of goals and metrics. Healthcare management standards are a viable tool for planning, management, monitoring, and improvements necessary for a value-based payment system to succeed and deliver quality care.

A healthcare sector that continues to increase in size and importance is digital health, and one popular type is telehealth or telemedicine. McKinsey & Company reports a threefold increase in venture capitalist investment in virtual care and digital health from 2017 to 2020. They also report that telehealth utilization has stabilized at levels 38 times higher than before the pandemic. Uptake of telehealth continues to grow, with both patients and providers viewing it more favorably than they did prior to COVID-19. Healthcare organization management will play a pivotal role in defining safe, secure and effective telehealth processes. Deloitte’s Global Healthcare Outlook 2022 emphasizes the need for healthcare leaders to balance the benefits of medical technology with the practicalities of controlling healthcare spending.

Artificial Intelligence (AI) is the present and future of health care. According to the third annual Optum Survey on AI in Health Care 2020, 83% of healthcare organizations have an AI strategy in place, and another 15% are planning on creating one. Frost & Sullivan project sales of healthcare AI-enabled products to generate more than $34.83 billion globally by 2025. AI can be used in multiple areas of healthcare service delivery including pharmaceutical AI, chatbots, Genomics AI, operations/supply chains, research of complex diseases, disease prediction, social AI such as contact tracing, and the use of robots. Deloitte’s Global Healthcare Outlook 2022 explores the convergence of digital technologies and healthcare delivery models, emphasizing the need for healthcare leaders to “balance the benefits of medical technology with the practicalities of controlling healthcare spending.”  HSI believes that AI Governance is critical to assuring successful, ethical, safe and transparent integration of AI in the healthcare processes.