It's time for healthcare to finally embrace total transformation

It's time for healthcare to finally embrace total transformation unknown

Economic forces are converging to make 2023 a year of reckoning for healthcare. The industry is facing immense challenges — a widespread labor shortage, rising costs, shrinking margins and greater competition from new market entrants, to name only a few.

While many organizations are adopting incremental changes to survive in this difficult landscape, the reality is that gradual changes won’t be enough. Now is the time for leaders to embrace wholesale transformation or risk being left behind.

Those that effectively transform every facet of their business — from how they approach the consumer and patient experience to how they are paid — will be well-positioned for what’s next.

The transition will require courage from healthcare leaders, but there is an urgency to act: PwC research shows we’re in the middle of a five-year, $1 trillion revenue shift away from traditional healthcare payers and providers.

With this knowledge, PwC has laid out six pivotal areas of focus for organizations to thrive competitively in 2023 and well into the future.

• Confronting affordability and disrupting costs: Health plans and health systems should confront affordability head on in 2023. They must reshape strategies, and reengineer financial and business models, or competitors will beat them to it. Legacy plans and systems can lower costs by staffing to demand, contracting labor spending, employing effective capacity management, embedding automation and rethinking strategic sourcing and partnerships.
• Digitizing healthcare: Technology and cloud infrastructure are the foundation for a vastly improved and seamless experience for every stakeholder in healthcare, including consumers, clinicians, employers and even regulators. Health plans and systems must continue to transform healthcare delivery through digital health and analytics, with an eye toward investments that boost effectiveness and nimbleness.
• Attracting and retaining customers: Shifts in consumer behavior and expectations are encouraging payers and providers to engage with members and patients with renewed energy. At the same time, federal and commercial payers are further integrating customer experience into reimbursement models. Providers striving to be the preferred choice among consumers will be smart to invest in enhanced digital experiences and improved access through tools such as apps and portals.
• Rethinking risk: The industry was pummeled by cyber breaches throughout the past year, and all signs point to 2023 keeping pace. In addition to cyber threats, other areas of risk in healthcare include crisis response, catastrophic readiness and supply chain disruptions. Organizations needs to raise the bar to navigate changing risks and protect patients through proactive cybersecurity and privacy practices.
• Solving systemic clinical workforce shortages: Novel approaches to care delivery are necessary to help resolve persistent labor shortages. Providers should consider setting an aggressive digital- and automation-led agenda to improve productivity and minimize administrative burden. Other solutions include implementing telemedicine and digital care, which can enable clinicians to work at their optimum level while offering new sites for care and greater patient engagement.
• Delivering value: PwC anticipates continued deals in healthcare, but value must be the driving force behind them. Value-based care models will remain prime targets for investors, taking the shape of companies focused on primary care, home health, consumer technology, data and digital platforms.

To learn more about these six pressing issues facing healthcare, check out PwC’s Next in Health Services 2023 report. And stay up to date on solutions to help hospitals and health plans compete in the evolving healthcare ecosystem here.

About the author

Thom Bales is a principal with Strategy&, PwC’s strategy consulting business, and the leader of PwC’s Health Services Sector. He has over 17 years of management consulting experience, originally with Booz Allen Hamilton/ Booz & Company that merged with PwC to become Strategy&.

Sponsored by