The return to normal following COVID is not going to happen. Instead, economic, environmental, societal, geopolitical, and technology factors are reshaping healthcare globally and in the U.S. Understanding the forces at play can provide important insights for charting a course for 2023 and the decade ahead.
The recently released World Economic Forum’s Global Risks Report 2023 identifies five newly emerging/ rapidly accelerating risks that could become a crisis by 2033 if immediate action isn’t taken – human health is one of them. It says growing financial pressure, budget cuts, revenue losses, higher costs of goods and labor, and the predicted global shortfall of 15 million health workers by 2030 are driving productivity declines and safety issues. What’s more, with medical inflation continuing to outpace GDP growth and the predicted government/insurer/employer response of limiting coverage, shifting costs, and reducing healthcare access and affordability, we may find ourselves with a “deeply entrenched” two-tier healthcare system for the haves and have nots.
The report goes onto say changing this trajectory will involve public health policy and interventions; collaboration and coordination among public health agencies, healthcare providers and funders; stronger national and global health institutions and systems; and innovative care delivery, staffing and funding to prevent disease, promote early detection, and provide cost-effective care to the chronically ill. Also, opportunities exist for increasing capacity, combining virtual and in-person care, and reducing costs via technology and digital transformation.
Concurrent with the risk report, the World Economic Forum completed a Global Health and Healthcare Strategic Outlook with the goal of uniting stakeholders behind a shared healthcare vision and actions to drive systemic long-term change. The vision has four strategic pillars:
- Equitable access and outcomes: Equilibrating access to determinants of health, ensuring health data is representative of the population and people with equal needs achieve equal health outcomes.
- Healthcare system transformation: Structuring resilient healthcare systems to provide high-quality care under both expected and unexpected circumstances.
- Technology and innovation: Cultivating an environment that supports funding, use and implementation of innovation in science and medicine.
- Environmental sustainability: Reducing the healthcare industry’s environmental impact, preparing for and addressing climate change for better health and wellness.
When it comes to the U.S. healthcare, McKinsey & Company outlined challenges and opportunities that lay ahead in its Gathering Storm series. An Opportunity to Reorder the Healthcare Industry reports, “This gathering storm has the potential to reorder the healthcare industry and put nearly half of the profit pools at risk. Those who thrive will tap into the $1 trillion of known improvement opportunities by redesigning their organizations for speed, accelerating productivity improvements, reshaping their portfolio, innovating new business models to refashion care, and reallocating constrained resources.”
As noted in the series’ introductory article, How Leaders Can Respond and Thrive: “Healthcare leaders, especially those in the private sector, have an opportunity to step up and invest in innovation for the betterment of healthcare. Indeed, implementing a well-known set of interventions—in care delivery transformation, administrative simplification, clinical productivity, and technology enablement—could generate a collective opportunity of more than $1 trillion and potentially up to $1.5 trillion through 2027, according to McKinsey analysis. However, to move fast enough to capture this opportunity, healthcare leaders need to rethink how they approach organizational growth and transformation. Those who act now could set themselves apart in leading transformative improvements of healthcare and accrue a sustainable competitive advantage for their organizations.”
Whether you’re at the initial stages of understanding the new global and U.S. landscape for healthcare or embarking on an already formed strategic plan, remember, RBT CPAs can help. You can trust our accounting, tax, audit, and advisory services professionals to take on these responsibilities so you can reallocate resources to what’s really important – shaping the future of healthcare and your organization. Interested in learning what we can do for you? Give us a call.
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