2023 Health System Trends

A Guidehouse Center for Health Insights analysis found hospital and health system executives are projecting outpatient volumes to increase in 2023. Leaders are also focused on ramping up digital care, reducing their reliance on traveling clinicians, and hiring more advanced practitioners and behavioral health providers this year. The analysis is based on a Healthcare Financial Management Association (HFMA) survey of 182 hospital and health system CEOs, CFOs, COOs, and other executives conducted in collaboration with Guidehouse.

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Projected 2023 Shifts in Hospital Volume Distribution

95% of executives project outpatient volumes to increase in 2023 while 41% of leaders project inpatient volumes to drop.

By how much do you project patient volumes to increase or decrease over the next 12 months?

Executives also expect major emergency department (ED) and elective procedure volume increases.

Fundamental changes are contributing to unpredictability in the demand for emergency room visits, inpatient volume, ambulatory surgery procedures, outpatient visits, length of stay, case mix index, virtual care, and more. In turn, almost universally, hospitals and health systems are facing financial and operational instability like never before.

It is critically important for leaders to closely monitor the indicators that would lead to these increases, including conversion rates for ED visits, primary care appointments, and high-volume areas like gastroenterology and elective surgeries. These expected shifts should inform an overarching growth strategy that is focused on person-centered care, such as excellence in ambulatory services, to create sustainable business models that attract and retain patients in an era of volatility.

For example, one of the major economic trends swirling around providers that will make 2023 even more challenging is the growth of Medicare Advantage and preferred versus standard fee-for-service Medicare, as well as the rise of innovative primary care physician groups. Today, hospitals are netting less from Medicare Advantage than traditional Medicare. Providers should be preparing today to manage the total cost of care for these populations. By attaining critical mass effectively, organizations can negotiate favorable contract terms that help drive savings from care model improvement.

Projected Hospital Workforce Challenges

96% of leaders reported the state of their workforce is having a negative impact on their growth strategy, with 62% citing a significantly negative impact.

Is your workforce having a negative, positive, or neutral impact on your 2023 growth strategy?

Labor is the root cause of delays in care delivery innovation. Clinician burnout, staff resignations, executive retirements, and equity issues now define many health system work environments. Fundamental changes in culture, work redesign, and workforce development are essential for providers to thrive in the new healthcare economy.

The characteristics of that new work environment include a culture of innovation, team-based care, and listening to multigenerational expectations. This calls for an employment structure that offers a variety of work models such as remote and shared jobs, a clinical staff with an innovative mix of skillsets and licensures, and technology-enabled, streamlined workflows to increase productivity and retention.

Projected 2023 Shifts in Staffing Distribution

Most leaders are planning to reduce the number of contractors and traveling clinicians, while focusing on hiring more advanced practitioners and behavioral and mental health providers.

By how much do you project staffing to increase or decrease in the following areas?

Health systems are struggling to afford the vast increase in the need for contractors and traveling clinicians. With short-term contracts coming to an end, leading organizations are finding attractive ways to retain these caregivers full-time and integrate them into the business.

As organizations determine the best way to establish themselves as preferred providers, they may find they need fewer physicians to achieve these goals. Adding more behavioral health providers, social workers, and case managers to the team could help take pressure off overloaded medical professionals while giving patients the right support in the right setting, including in the home.

Area with the Greatest Projected % Budget Increase in 2023

Leaders are projecting digital care as their greatest budget increase this year, followed by revenue cycle automation.

Please select the area your organization is projecting the greatest percentage budget increase in the next 12 months.

With growth in labor and supply costs, many leaders are turning to purposeful artificial intelligence, automation, and digital care strategies to improve engagement and efficiency.

Successful organizations are reevaluating their digital connectivity strategies to ensure patients and caregivers know how to access and use patient portals, EHRs, and other technologies, as well as to streamline corporate and non-clinical services. Additionally, revenue cycle automation solutions can transform the way companies do business by industrializing repetitive tasks to improve efficiency and reduce costs while also providing process support for complex activities.

About the Survey

The HFMA survey of 182 hospital and health system executives was conducted in collaboration with and analyzed by Guidehouse from October-November 2022, and C-suite executives made up 80% of respondents.

Ranked 2022’s second-largest healthcare management consulting firm by Modern Healthcare, Guidehouse helps providers, government agencies, life sciences companies, employers, payers, and other organizations solve the industry’s most complex challenges. The Guidehouse Health team includes experts from a range of commercial and public health backgrounds who share knowledge to modernize and innovate healthcare services, finances, and operations.

Visit the Guidehouse Center for Health Insights for healthcare insights on digitally powered and person-centered health, financial resiliency, environmental sustainability, and more.