Healthcare’s Biggest Trends in 2023: Industry Forecast from Redesign Health 

Each year pushes healthcare modernization forward, but 2023 may be the year healthcare leaders refocus on administration upgrades. While largely out of view of consumers, these enhancements will drive efficiencies and ultimately improve profitability for healthcare systems.

Rona Li, Managing Director, explains: “Administration spending contributes around $1 trillion in healthcare spending, with the bulk hiding in financial and corporate functions of payers, pharma and health systems that only those from within can truly understand. Expect partnerships between incumbents and innovators to continue to address these pain points.”

Venture Chair Missy Krasner echoes the rise of the “unsexy business” in powering healthcare workstreams and offering investing opportunities. “Incumbents, such as payers and providers, will embrace administrative software solutions, while infrastructure as a service brings new innovation to billing, RCM, eligibility, scheduling and member engagement.” 

Hybrid care models will continue to change the game for patients and providers looking for more flexibility in reaching diverse populations across the healthcare continuum. 

“The majority of value-based savings opportunities fall into high-cost specialty care, like cardiology, orthopedics, oncology and behavioral health,” shares Mark Rosenblum, Managing Director of New Ventures. “To date, these areas have lacked the scale and ability to measure required for at-risk pricing agreements.” 

Venture Chair Danielle Russella thinks retail clinics will double their share of the primary care market. “Players like Amazon, Optum, Walmart and Walgreens have the money to invest in this lucrative space and are likely to offer better experiences and price than traditional health systems.”

Eric Morris, Managing Director, thinks we’ll shift from prevention as a cost-reduction measure toward high-cost chronic disease management. “As technology becomes ubiquitous and easier to develop, clinical efficacy will take center stage, and care models and clinical results will become moats.”

If there was a silver lining to the pandemic, it was opening the door to virtual care solutions, something experts predict will extend into 2023. While the industry has made progress in this area, it still has a long way to go.

“Despite all the advances in medicine and new innovations,” Alicia Bloom, Vice President, says, “individuals and families still struggle to access the care they need, whether for wellness and prevention or chronic disease management. Access issues could be related to coverage and affordability, geographic location, and long wait times due to workforce shortages, to name a few.”

Virtual solutions, telemedicine and community-based care hold the key to serving those populations. Grossman, Bloom and Neil Patel, Head of New Ventures, all cited the temporary telehealth expansion granted during the COVID-19 health emergency as a much-needed tool for providing accessible care. 

Drug costs are likely to also come down, with Head of New Business Development Kyle Tatz predicting that “2023 will be the year that payers and government entities finally make headway in reducing drug pricing for high-cost solutions and insulin.”

What benchmarks will we use to measure both health and financial gains? The coming year may be a gamechanger for even the most widely accepted policies. 

We could see what Advisor Scott Disch describes as a move from “episodic cost measurement to longitudinal chronic disease management.” While the past decade has prioritized quality measures, risk adjustment, post-acute transitions, patient engagement and keeping people out of the ER, this won’t be the way to manage Medical Loss Ratio (MLR). 

Disch anticipates utilization, decision support and “next-generation care management” may change the tide for payers and financiers. He notes, “Investors are expecting a waterfall effect on MLR and for new companies to get paid on milestone achievement or results, and no more advance Per Member Per Month Payments (PMPM) with a future promise of cost improvement.”  

For both small and large healthcare systems that survived the turmoil of the past few years, more change is looming. While health systems have relied heavily on investment income and access to cheap capital to grow despite razor-thin margins, the market downturn and labor costs may force additional mergers and acquisitions. 

The result? “Physicians who sold their practices to health systems will leave and/or buy their practices back as they see greater opportunities to thrive in independent practice,” Patel explains. “They could capture a greater share of the value they generate via risk-based arrangements with payers."

Meanwhile, Rona Li notes, “Over the past few years, innovation in payment models and delivery modalities has opened up the ability to address more needs than ever before. However, as stakeholders have become inundated with options, there is the need not only to consolidate, but to ‘stitch’ solutions into the existing infrastructure.”  This could include greater collaboration with family caregivers and virtual third-party staff to coordinate care and eliminate redundancies; helping patients choose the right care and patch together services; and leveraging data to better serve patients at every stage of their journey.