Inflation has had a profound impact on all areas of the economy, including health care. Yet even as signs indicate that inflation is slowing, a recent consumer survey conducted by Deloitte indicates that 28% of Americans, or roughly 72 million adults, feel less prepared to pay for medical costs than they did last year.
Meanwhile, more than three out of four of the 131 health care and life sciences leaders surveyed by Deloitte’s Center for Health Solutions say they expect inflation and affordability to have a major impact on their organizations this year.
Inflation: An Agent for Accelerated Change
Health care organizations find themselves in a difficult spot in this environment. While overall inflation is growing at about 6-8% according to the Bureau of Labor Statistics, health care costs are rising at a much lower rate. This has left many provider organizations struggling to make ends meet as wage inflation and higher supply costs have squeezed hospitals and health systems financially.
Despite these near-term challenges, Pete Lyons, Deloitte’s national life sciences sector leader, sees opportunities for health care providers.
As organizations continue to transform themselves in areas like being more responsive to consumer preferences, digital health and becoming more efficient, health care may reach a desired future state faster than many experts predicted, Lyons suggests.
4 Trends That May Reshape Health Care in 2023
1 | Hybrid health could be a winning model.
Nearly two-thirds of people Deloitte surveyed last year who experienced a virtual health care visit cited convenience (38%) or cost (27%) as the top reasons for accessing virtual health tools. Lyons suspects we could begin to see a streamlined care model that combines traditional, virtual and alternative care sites (e.g., retail clinics and urgent care centers).
For this model to reach its potential, traditional health care stakeholders will need to work more closely with retailers, tech companies and other nontraditional players.
2 | Trust may become the new currency for health care.
In the last several years, trust often has come to define the adoption of new care models and new products. For example, 63% of consumers surveyed said they are willing to switch providers if they don’t like the way their doctors communicate with them, Deloitte research shows. In addition, about half the people who participated in consumer focus groups said they would be willing to trade in-person visits and the convenience of a closer location for a provider who relates to them and understands their needs.
The trusting, personal relationships providers have built and nurtured with patients may not show up on a balance sheet, but they need to be recognized, valued and leveraged to maintain strength and differentiate traditional providers in the marketplace. Not all communities feel the same level of trust with their health care providers. There continue to be large disparities in trust by race/ethnicity. A critical area of focus for health equity is rebuilding trust with racially and ethnically diverse communities.
3 | Health equity won’t be seen as a side hustle.
Health inequities cost the U.S. about $320 billion a year today and could approach $1 trillion by 2040 if left unaddressed, according to a Deloitte analysis. This could be the year that health care organizations begin to unlock that value proposition with the development of new care models and ecosystems.
Many Deloitte clients are beginning to integrate health equity into their growth, financial, operational and quality strategies, notes Jay Bhatt, D.O., who heads the Deloitte Health Equity Institute and Center for Health Solutions. As environmental, social and governance (ESG) strategies gain traction across health care, core operations, the supply chain and workforce all may need to be reevaluated through a health equity lens.
4 | Climate and sustainability could impact investment strategies.
Focusing on climate, sustainability and equity is an increasingly important issue for health care organizations, but investment capital has become more costly lately due to high interest rates and inflation. This could cause some organizations to become more conservative with investments in technologies.
Forming strategic partnerships with companies that are developing new platforms with broad-range capabilities to improve health care operations and reduce environmental impact may be one way to avoid investment delays. Finance and treasury teams might look to restructure capital and secure ESG bonds, which can offer more attractive rates.