After facing significant financial strain due to labor shortages, inflation, and the COVID-19 pandemic, the health care industry is beginning to recover. Profit pools are expected to increase at a 7 percent compound annual growth rate (CAGR), from $583 billion in 2022 to $819 billion by 2027.
Medicare Advantage
This segment shows strong performance, driven by an increasing population of individuals eligible for Medicaid and Medicare. Enrollment in Medicare Advantage is expected to grow at a 5 percent annual rate from 2022 to 2027.
Meanwhile, hospitals are leaving Medicare Advantage networks due to lower payout rates, causing insurance companies to change coverage options. Humana, the second-largest Medicare Advantage insurer, is preparing to lose about 200,000 members as it plans to limit benefits and exit some markets in 2025.
The Biden administration proposed changes to Medicare Advantage plans to help seniors find plans that will better suit their needs, promote access to behavioral health care, and increase the use of other benefits such as fitness and dental plans.
New rules for 2025 aim to crack down on agents and brokers who sell Medicare policies, ending the sales incentives that led to biased recommendations in the past.
Outpatient Care
Health systems are experiencing growth in outpatient care settings, such as physician offices and ambulatory surgery centers, due to shifts in site-of-care preferences. The use of electronic health records (EHRs) and other digital tools helps streamline outpatient care delivery, increasing efficiency and effectiveness.
The outpatient clinics market will grow significantly, with projections indicating it could reach $61 billion by 2033. This growth is driven by increasing demand for both convenient and accessible health care.
There’s growing emphasis on voluntary outpatient care as an integral part of mental health treatment. This approach aims to provide both freedom and flexibility for patients, as compared to traditional inpatient care. There’s a significant move away from inpatient toward outpatient settings. Advances in medical technology and minimally invasive procedures has allowed for more treatments to be done on an outpatient basis.
COVID-19 accelerated the adoption of telemedicine. Many patients and providers now embrace virtual visits, offering convenience and reducing the need for in-person appointments.
Technology and Automation
Investment in technology, including artificial intelligence and automation, is a major trend. These technologies are being used to improve patient financial experiences, optimize revenue cycle management, and enhance overall financial productivity.
- Artificial intelligence (AI) is being increasingly used to automate routine tasks, optimize processes, and enhance decision-making in health care.
- The use of data analytics is growing, helping health care providers make more informed decisions, improve patient outcomes, and streamline operations.
- Telehealth services and remote patient monitoring have become more prevalent, especially after the COVID-19 pandemic. These technologies allow for continuous patient care and monitoring from a distance.
- Wearable technology, such as fitness trackers and smartwatches, is being used to monitor patients’ health in real-time, providing valuable data to health care providers.
- Blockchain is being utilized to enhance data security and transparency in health care, ensuring that patient data is securely stored and easily accessible.
- Intelligent virtual assistants are being used to support health care providers and patients by offering reminders, answering questions, and providing information.
- The health care industry is increasingly adopting cloud technology to store and manage data, which allows for better scalability, accessibility, and collaboration1.
Pharmacy Services
Specialty pharmacy services are experiencing rapid growth, driven by the increasing demand for specialized medications and treatments. Trends in the pharmaceutical industry include:
- Use of artificial intelligence (AI) in pharma companies to accelerate drug discovery and development processes.
- Use of big data and analytics to utilize data for insights.
- Use of flexible production in adapting manufacturing processes.
- Use of precision medicine for tailoring treatments to individual patients.
- Use of additive manufacturing, such as 3D printing, for drug production.
- Use of blockchain for enhancing security and transparency.
- Use of extended reality for virtual and augmented reality applications.
- Use of real-world data from patient experiences.
Summary
- Health care spending represented 18.3 percent of the U.S. economy in 2021, with $4.3 trillion in revenue.
- Fourteen percent of U.S. adults are employed in the health care industry.
- An average American couple aged 65 and over needs around $315,000 saved for medical expenses during retirement.
- Forty-three percent of adult Americans are inadequately insured, and 20 percent don’t have the means to access needed health care.
- The United States ranks only the 35th healthiest country in the world.
- During pandemic in 2020, one-third of U.S. adults had a telehealth visit for themselves or a dependent.
There is a growing emphasis on preventive care, tackling disparities, expanding telehealth and in-home services, building integrated systems, and adopting value-based care models. Despite the progress, the industry faces ongoing challenges such as high inflation rates, labor shortages, and the need for cost optimization.
The Epoch Times copyright © 2024. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.