As 2022 draws to a close, it’s time to start planning for what looms on the horizon for healthcare. Our executive team at Healthlink Advisors is predicting some current trends will continue to develop — and even intensify — in 2023. Here are three insights on issues that will shape the new year:

  1. Staff shortages and clinician burnout will persist 

Labor challenges will continue to dominate the healthcare industry in 2023. According to a recent McKinsey analysis, “a gap of 200,000 to 450,000 registered nurses and 50,000 to 80,000 doctors” is expected by 2025. Additionally, researchers from the American Medical Association (AMA), Mayo Clinic, and Stanford Medicine have been jointly tracking physician burnout since 2011. They recently released findings indicating a “dramatic spike in the rate of physician burnout” with two out of every three physicians surveyed experiencing some sign of burnout. 

Clinical staff are not the only human resources increasingly in short supply. Societal shifts further compound recruitment and retention in healthcare IT and support specialties as well. Many skilled professionals can now work from anywhere in the US. These remote positions affect both local pay scales and the ability to recruit good talent. 

Rural health organizations continue to be impacted the most by the labor crisis. Unable to compete with the salaries of large, urban competitors, high vacancy rates will persist in 2023. 

To adapt, organizations that do not have the resources to effectively manage staff productivity and govern priorities will become prime candidates for both internal upskilling programs and for outsourcing services to mitigate the labor/skill/cost constraint challenges. Healthcare IT managed service providers will continue to see growth throughout 2023.

  1. The cloud will come into focus for healthcare IT leaders

To reach peak effectiveness, health systems must mesh their digital journey plans with strategic clinical and operational priorities. The maturity of cloud computing, competition, and cost pressures on healthcare organizations will commoditize cloud hosting providers and pressure them to grow more cost-effective in order to gain healthcare market share.

More organizations will seek to move clinical and business apps outside of their data centers to third party companies, including into the public cloud. Instead of a single solution, organizations will look at cloud services as an ecosystem of infrastructure and applications to draw from. As an example, moving Epic and the main integrated solutions into a cloud environment (clinical ecosystem) instead of just the EHR environment can improve options for extending operational and performance efficiency and allow the business to grow.

Due to increased activity in non-typical healthcare provider plays (for example, retail entities such as CVS and disruptors like Amazon), traditional healthcare entities will seek to enhance capabilities in consumer experience and retention by focusing on digital health/experience, analytics, and CRM — all vastly more sophisticated in cloud-powered models.

  1. Healthcare organizations face extreme pressure to do more with less

Operating profit in healthcare facilities will continue to see extreme pressure in 2023. As a result, IT, innovation, and clinical care redesign departments will be called to upskill and embrace new technologies with fewer resources. Healthcare leaders will need to focus on ensuring their existing teams can thrive with the right skills and support to innovate the path forward.

Independent hospitals that have fought off consolidation attempts will need to make significant investments in core health IT systems to complete, including ERP and EHR. And all hospitals will seek to increase their EBITA performance; thus CFOs will pressure CIOs to drive down costs. Specifically, EHR customers will seek to contain hardware and compute costs by leveraging public cloud for non-production workloads. They also could potentially increase their lobbying efforts with EHR vendors to constrain compute needs as new functionality is developed. 

Clinical staff constraints, high clinical salaries, and the market pressure to develop new care delivery pathways (for example, moving care into the home) will drive health systems towards establishing new partnerships to reduce financial performance penalties and find savings.

Tough challenges rarely disappear at dawn on New Year’s Day, and 2023 won’t be any exception. The healthcare industry is still struggling with sweeping change in an era of tremendous transformation. But there are also an amazing array of new tools and strategies for overcoming obstacles and seizing opportunities in the process. As always, Healthlink Advisors stands ready to support healthcare organizations in discovering and deploying what works best for their journey to a brighter future.