Forrester Unveils 5 Healthcare Predictions for 2023

What You Should Know:

– A new dawn is on the horizon in healthcare. Equipped with new digital capabilities and pressured by new consumer expectations for personalized, convenient experiences, healthcare organizations face a predicament — act now and stay afloat, fail to act and get consumed by the competition, or risk financial ruin.

– Market research leader Forrester’s latest report explores 5 key predictors for healthcare in 2023.

Healthcare in the Era Post-Covid

COVID-19 changed how consumers and brands do business, and healthcare organizations are no exception; the pandemic accelerated transformation by a decade. In 2023, hospitals must identify their financial risk and focus on employee retention and recruitment as the threat of a recession looms. Healthcare organizations must reevaluate their approach to consumer engagement and experience as external industry players vie for a larger foothold in the healthcare market. Care will continue to extend beyond brick-and-mortar settings as technology advances to support chronic care management and decentralized trials in remote settings.

The top 5 predictions made by Forrester regarding 2023 are listed and explained as follows:

1. Economic downturn and consumer behaviors will spike hospital bankruptcies by a third: Inflation, the nurse staffing crisis, labor cost hikes, supply chain disruption, and sourcing shortages are breaking the banks of US hospitals and shutting their doors. Over the next 12 months, hospitals that averted financial crisis due to the Fed’s contingency provisions, state-based funding sources, and lender-granted waivers and extensions will succumb to a lack of cash flow.

In 2023, hospital and health system expenses are expected to increase by nearly $135 billion, driven by a projected $86 billion increase in labor expenses. Backlogs for surgery, imaging, and diagnostic services will prevent hospitals from recovering a $20 billion loss of revenue, spurred by the shutdown of elective procedures from March to May 2020. Chapter 11 bankruptcy filings for large healthcare organizations in 2022 are tracking 28% higher than in 2021, and this comes after large healthcare organization bankruptcies in 2021 were 44% behind 2020 levels. More than 30% of all rural hospitals are at immediate risk of closure due to low financial reserves or reliance on government aid.

Patient volumes, high-deductible health plans, and commercial insurance rates will move the needle on hospital sensitivity to recession from low to high. A lack of access to hospital care for underserved, chronically ill, and elderly populations will result in serious ramifications for public health and the economy. To navigate this crisis and stay afloat, hospitals should start quantifying their financial distress levels now by calculating their Z-score monthly and tracking it over 24 to 36 months. This will help identify risks and trigger a financial turnaround strategy for hospitals at or near the red zone.

2. Retail health clinics will double their share of the primary care market: Forrester forecasts that retail health clinics will double their share of the primary care market in 2023, fuelled by patient demand and additional retail companies looking to join the ranks of CVS-Aetna, Walgreens, Walmart, Amazon, and Optum-UnitedHealth Group, which are all buying primary care practices or hiring PCPs directly. In 2023, patients will choose retail health for their primary care needs, as health systems, constrained by inadequate resources, fail to match retail’s elevated patient experiences. Retailers’ large consumer bases and multiple store locations give them a leg up offering immediate care options when, where, and how patients want and need them.

The CDC says that nearly nine in 10 Americans live within five miles of a community pharmacy, making primary care readily available. Additionally, an increase in retail health clinics will help lower the cost burden on healthcare organizations and patients, with Modern Healthcare stating that care at retail clinics costs around 30% less than similar treatment at physician offices and 80% less than similar treatment at emergency departments. As retail health doubles its share of the primary care space, demand for health systems to step up their patient experience game will increase as patients flock to retail health primary care providers.

3. Decentralised clinical trials will double, signaling a shift in rural patient participation: During the past decade, DCTs have quietly made inroads into the vast landscape of clinical research. Only 120 DCTs were initiated globally, or a meager 0.4% of all initiated trials, in 2019. The pandemic dramatically exacerbated clinical study recruitment problems and catalyzed trial decentralization: 230 DCTs commenced in 2020 and 422 in 2021.

Forrester believes this surge was not just a knee-jerk reaction to the lockdown but the beginning of a lasting change in patient recruitment practices. The pressure to speed up time to market and clinical study diversity and inclusion imperatives will leave the industry with no option but to embrace trial decentralization and increasingly adopt DCT-enabling technologies for remote monitoring, engagement, and telemedicine. Entrepreneurs and disruptors in this space must convince investors that the DCT business model is viable. Study sponsors and contractors should take advantage of the favorable regulatory environment for DCTs and incorporate DCTs into their workflow. This will alleviate geographical barriers and bring clinical trials to a broader range of patients.

4. A quarter of US adults will be treated with RPM tools for chronic conditions: The need to monitor, report on, and analyze patients with chronic conditions in their time of need is a national imperative. Forrester predicts that remote patient monitoring (RPM) tools will play a critical role in treating multimorbid patients to mitigate potentially avoidable hospitalizations and the exacerbation of chronic diseases. In 2022, RPM became the beating heart of acute care at-home programs, now operating in 114 systems and 253 hospitals in 37 states.

There are now five codes specific to RPM services, facilitating reimbursement and widespread adoption. The global RPM market is projected to reach $175.2 billion by 2027, from $53.6 billion in 2022, at a CAGR of 26.7%. Devices like weight scales, pulse oximeters, blood glucose meters, blood pressure monitors, heart monitors, and wearables will improve clinical prognosis and remove socioeconomic hurdles due to social determinants of health. RPM implementers must take a multifaceted approach to safeguard their own network infrastructure, devices, the edge, and the cloud using administrative, technical, and physical safeguards for optimal security and patient outcomes.

5. Forty percent of the hospitality industry will offer mental health benefits: A healthy workforce is the backbone of the hospitality industry, yet the burnout rate of people working in this industry is among the highest of all industries. Stress, anxiety, and depression caused by employment rank among the top reasons that hospitality employees seek employment elsewhere. Four out of five hospitality employees report high-stress levels due to their positions, and the CDC reports an overall increase in depression and anxiety symptoms to 42% across the US. In response, the hospitality industry is snapping into action and has begun offering healthcare benefits — including mental health services — to combat high turnover. In fact, 87% of employers said that enhancing medical health benefits will be among their top priorities in the coming years.

This includes access to free or reduced-price counseling sessions, subscriptions to virtual health offerings, as well as subscriptions to wellness apps. Monitoring morale and welfare requires reassessing and reestablishing burnout prevention and management strategies continuously. Employers should partner now with a teletherapy company that offers evidence-based solutions — including cognitive behavioral therapy, coaching, symptom tracking, and therapy appointments — to ensure improvement in employee mental health. This will bolster their employee medical benefit offerings, help retain staff, and improve their employees’ mental well-being.

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