Healthcare outlook 2024: Healthcare technology trends that will shape 2024
The right tools and staffing plans can help chart a stable course
Many of the biggest challenges facing the healthcare sector have been nodded at, poked at and studied by esteemed panels in recent years. Still, little action has occurred to fix systemic issues affecting the healthcare market today: squeezed budgets, staffing shortages and an unforgiving surge in service demand.
The reasons why are entrenched and complex, but the time is now for organizations to face their operational difficulties head-on with a new mindset, ready to embrace change and pursue a different health future.
Major financial developments in healthcare
Healthcare currently accounts for more than 18% of U.S. GDP; by 2030, it’s expected to reach 30%. There is no turning away from the necessity of tackling the inefficiencies and obstacles that keep the industry from meeting expectations both in financial management and in the delivery of care to patients.
The urgencies of the COVID-19 pandemic put most new operational ideas and advances on hold. That devastating period exposed systemic vulnerabilities in our healthcare systems not only related to care delivery but also in the weak (and often opaque) financial underpinnings of those organizations.
Pandemic-era government funding enabled healthcare organizations to limp along at the time (and afterward) by covering their immediate shortfalls. Institutions were temporarily able to spend pretty much whatever it took to fill nursing vacancies with traveling staff. PPP loans, employee retention tax credits and other incentives helped mute the pain of declining revenues and keep operations at a minimally functional level.
But with the end of those programs, and consumer demand for service unrelentingly high, it’s impossible to understate how ill-equipped the healthcare system is to tackle the host of challenges they face today. The balance between the growing needs of patients in an aging population and the iron-clad restrictions of the prospective payment system in which reimbursements are based on a predetermined, fixed amount that invariably falls far below actual costs is, to put it bluntly, massively out of whack.
Managing people and digital trends in healthcare
Tackling the complexities of the healthcare system in 2024 requires organizations to take a thoughtful and unflinching look at their approach to managing people and new healthcare technology that can help staff understand and navigate their circumstances better.
Overhauling the staffing and technology paradigms is essential for all major healthcare categories:
- Hospitals
- Acute care, outpatient clinics and other community health centers
- Senior living and skilled nursing facilities
Staffing woes
Staffing costs are up and healthcare organizations can do very little to change revenue streams to pay for them. Negotiating with commercial payers is difficult and Medicare and Medicaid reimbursements are essentially locked.
In recent years, healthcare organization’s immediate response has been to cut costs by laying off nonessential staff, middle management and other administrative positions. The idea was that eliminating those positions freed up dollars for patient-facing areas.
But now many organizations are facing a staffing crisis. The layoffs and restructuring got them through the immediate crisis, but now they struggle with the “Where do we go from here?” question.
Healthcare technology trends
New healthcare technology is a key answer if it’s handled in a careful and methodical way. Healthcare and senior living organizations can’t just jump at the next intriguing sales pitch and assume that buying that product will solve their problems.
Organizations need to prepare for automation and artificial intelligence by getting their foundational operations well organized and in place. This includes data infrastructure, management and governance. They need well-functioning software systems to be the engine for automation, covering electronic health records, ERP financial software and their CRM as it relates to patient management. By investing in foundational work, they’ll be far better equipped to adopt new healthcare technology that makes sense for their organization.
Capital spending is less likely to center on new or repurposing facilities (high interest rates and economic uncertainties continue to fuel the mounting caution). It’s simply not the right time to build more medical offices, hospitals or senior living facilities when staffing remains a seemingly intractable issue. Instead, hospitals will invest in new healthcare technology and automation to build greater efficiencies in clinical and back-office operations.
Hospitals
Because the majority of hospitals are nonprofits and had access to low-cost debt, they benefited from favorable loan rates and are able to manage costs better than other sectors for any new construction or facility expansion they have done in recent years. This has mostly insulated them from another pending threat — interest rate resets that are coming due in a high-rate environment. This positions them for a comparably stronger financial health future than for-profit organizations.
For larger hospitals that acquired smaller ones in the years before the COVID-19 pandemic, they may not have put enough energy and attention into streamlining their financial systems. Indeed, each building may use its own holdover system that doesn’t communicate with the others. When an institution operates with multiple systems, it may be impossible to get a handle on total spending, how much revenue is coming in or whether billing is being handled and posted correctly. Such organizations have an incomplete or inaccurate picture of their financial health, now and into the future.
Senior living organizations
Financial challenges can be steep in senior living organizations. The vast majority are for-profit entities, and so on top of any high-interest loans they have to manage, they had the high-stress COVID-19 period to work through. Many went under or were sold during that period and some emerged, but with very weak financials.
Commercial financing resets are likely to add significant new pressures. Expect to see continued financial distress, restructurings, bankruptcies and more sales and consolidation in the senior living space.
The financial distress may mean fewer beds on top of staffing challenges. In many areas, there are simply not enough spots in senior living to meet the growing demand, especially in rural and other less densely populated areas.
By investing in the right financial software, many organizations may be able to manage with fewer staff than they had before and also focus in more discerning ways on how they manage their different business units.
Finding fresh solutions
Standardization around financial systems and provider contracts is an important goal for all players in healthcare. The result is that organizations will have easy access to metrics they haven’t been able to see before and more insight into healthcare market research trends.
The same thinking applies on the clinical side. What’s the point of an X-ray or CT machine producing stats that don’t communicate with any other parts of the institution? New healthcare technology that incorporates integrated, efficient technologies to support business and clinical processes is an important step in building a stable future. Organizations that can’t commit to that journey and make those investments are less likely to survive the evolution of the hospital industry today.
Medical “deserts” with the most acute shortages of facilities and providers may be the first to embrace process automation in a big way because they have no choice. Telehealth medicine may be the only option in some medical fields. There may well be government incentives to encourage broader use of EHRs.
Still, developing the right culture in a workplace will continue to matter. Even in a struggling sector like skilled nursing facilities, an organization that can be hyper-attentive to job applicants and show them they care about staff from the first point of contact is on its way to excelling in staff retention. When a candidate inquires about a job, reach out to them right away. Learn what kind of work they can do and be as flexible as possible with their schedules. Organizations that show they care about employees from the start will be much more likely to keep them over the long haul.
The old ways are no longer sustainable. Business and care delivery models must adapt to match digital trends in healthcare. Making smart investments in people and new healthcare technology will pay off, but it won’t be an easy journey.
How Wipfli can help
Are you ready to tackle the latest healthcare technology trends and challenges? Wipfli can help. From digital transformation to strategic planning to talent optimization, we help healthcare organizations navigate change and come out strong. Learn how to get started.
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