THE OUTLOOK FOR HEALTH CARE IN 2023:

What you need to know about the forces reshaping our industry.

X
Blog Post

The 5 things we're watching in international healthcare in 2023

By Miles CottierIsis MonteiroAlexander PolyakVidal SeegobinPaul Trigonoplos

January 10, 2023

    Health systems around the world are ringing in the new year facing some considerable, but familiar, challenges: threats to financial sustainability, changing policy landscapes, chronic capacity pressures and workforce shortages, and ground-breaking advancements in technology.

    Here, our team shares our predictions about how these forces present new opportunities for health systems, and how their consequences could lead to positive change in the industry across 2023.

    1. Financial pressures will dictate health system progress toward environmental sustainability targets

    By Miles Cottier

    Health systems are currently operating under tighter—or even negative—margins. It's easy to make the case that, in a cash-poor environment, health systems are likely to deprioritize efforts to reduce their environmental impact. Significant upfront costs to retrofit or build sustainable energy systems have historically turned CFOs off from investing in these projects, even though they deliver proven ROI and reduce operational costs in the long-term. It's a hard sell right now to spend money to save money.

    Health systems are now looking for alternative ways to access the capital needed to invest in green projects and we expect the amount of financial experimentation to increase in 2023 as the market is ripe for it.

    This picked up pace last year with legislation like the Inflation Reduction Act in the US incentivizing health systems to pursue and monetize renewable energy projects, reducing the threshold for investment into sustainability.

    The rise of Environmental, Social, Governance (ESG) as a principal investment evaluation tool has created clamor around environmentally sound practices as a way of unlocking capital that isn't accessible to unsustainable organizations. We expect more ESG-centered health system policies and strategies across 2023 as the market punishes slower-moving organizations.

    What's more, we've seen an uptick in the number of organizations worldwide adopting green financing mechanisms like green bonds or green loans. These can offer health systems access to the capital they need to invest in sustainable projects at lower interest rates—and lower risk—than most other offerings.

    Inevitably, financial markets will be both the carrot and the stick to getting the healthcare sector on the path to net zero. The financial environment is setting itself up to reward health systems that pursue environmental sustainability and penalize those that get left behind. This will likely intensify as we expect more governmental and regulatory legislation across 2023 that will require health system emissions reporting and adherence to sustainability targets.

    2. Health systems will increase their partnership activity overseas to alleviate financial pressures and deliver on their mission

    By Isis Monteiro

    We're getting a growing number of questions from our members asking how, why, and with whom health systems are partnering overseas. There's been an uptick in partnership activity abroad in recent years as health systems explore new opportunities to meet revenue-related and mission-driven goals, and I expect that this trend to become more salient this year.

    The pandemic made clear the interdependencies of health systems and highlighted the ways they stand to benefit from international collaboration—as exemplified through research on new variants and exchanges of knowledge and best practices, for instance. On the flip side, the pandemic also created unsustainable pressures on public systems, particularly in the U.K., Canada, and Australia.

    This has led to an unprecedented number of patients opting to pay out of pocket for procedures or taking up private insurance, which presents an opportunity for health systems to generate revenue from patients abroad. Additionally, a growing middle class in markets with a sizable population of underserved patients present an opportunity for health systems to capture new volumes, while delivering on their mission to expand access to care.

    I predict that a growing number of health systems will buy or partner with providers overseas to generate extra revenue, as well as expand opportunities for research, innovation, knowledge exchange, and workforce training and recruitment. This will lead to competitors wanting to get in on the action as well, and FOMO will accelerate an already-growing trend.

    Across the first half of the year, I'll be tracking how, and how many, public and private health systems across the world forge partnerships with foreign providers, governments, private companies, public entities, and academic institutions to meet a range of short- and long-term objectives, beyond generating revenue.  

    3. 2023 will be a make-or-break year for Emergency Department reform

    By Alex Polyak

    Something's gotta give. After a decade of focus on improved throughput, patient flow best-practices, and ED alternative site-of-care shifts, most emergency departments are more crowded than they've ever been. And while it's tempting to blame COVID, and the workforce crisis, and the lack of aged care beds, and the difficulty in getting GP appointments, and the many other factors that pile patients into our EDs, solutions to these problems aren't coming anytime soon. Instead, in 2023 we have to make some tough choices on how to change our ED strategy to align with the unideal world around it.

    Providers have already had to make difficult staffing decisions during this flu season, re-engaging pandemic-era models to flex staff from other units to cope with surges in EDs. These models, traditionally deployed during crisis scenarios, will increasingly become the norm for ED operators, particularly as our workforce crisis deepens. Similarly, healthcare leaders around the globe will have to learn how to maximize the efficiency of their limited ED resources through better usage of clinician decision support systems.

    Ultimately, in order to build sustainable ED models for 2023 and beyond, providers must embrace dynamic conceptions of how to deliver emergency services, from investment in free-standing EDs to transformation of how clinicians use evidence to bolster faster decision-making.

    It's a tall order for any one provider. But one thing's for sure: 2023 will not allow for business as usual when it comes to ED operations or even ED improvement.

    4. Most of the immigration policy that governments pass to fill workforce shortages will remain too narrow to solve the problem

    By Paul Trigonoplos

    Japan used to be somewhat of a global outlier in regard to its demographic crisis. But a growing number of nations are now facing simultaneously aging populations and declining birth-rates. While that combination clearly threatens each nation's long-term economic growth, it also threatens their healthcare systems. Many developed countries now see their future as one where there are far more people to care for than there are clinicians required to deliver that care.

    Across 2021 and 2022, workforce shortages in healthcare became the headline worldwide. We saw a policy wave begin to form as the UK, Finland, Australia, Germany, UAE, and Singapore, to name a few, put agreements in place to recruit clinicians from countries in Southeast Asia and Africa in attempts to prop up their healthcare workforces over the coming decades. 

    I predict that many more nations will enter into such healthcare immigration policies in 2023. But I also will be watching for fallout that will come from policies that unilaterally rely on immigration to solve the issue, as many of 2022's policies did. We know that the Philippines, one of the biggest exporter of foreign clinicians, is facing a domestic nursing shortage of over 100,000 staff despite capping the number of nurses allowed to expatriate each year. Countries such as this cannot sustainably supply the world's workforce.

    Further, we know that foreign clinicians can be exploited upon arrival—they are generally paid less than domestic peers and may even lose the ability to practice at the top of their license when moving nations.

    Any nation facing a healthcare workforce shortage should be looking at 2023 as a test case for smart, comprehensive policy that balances immigration with domestic investment and cultural change efforts within their healthcare sector.

    5. GPT-3 will have a massive, and lasting, impact on healthcare

    By Vidal Seegobin

    ChatGPT quickly became the site always open on my browser. Whether to help me streamline a paragraph, answer questions about bond yields, or settle once and for all if Picard really is better than Kirk, I'm obsessed with this AI tool.

    ChatGPT is the newest, open to everyone, application of GPT-3 technology. At its core it's an AI that has been "fed" the internet and created its own connections to now link elements and ideas to respond, in novel ways—all while answering in a very human-sounding way.

    All of which forces me to ask, "if I became such an avid user of this AI for my knowledge work, could that translate to healthcare?" And that's precisely my question for 2023.

    Much is promised about AI's transformative power on society and healthcare. And we're still waiting on the revolution. But what's pushed me from skeptic to curious on GPT-3 is that it hits the sweet spot. It's flexible enough for users to pick the cases where they want to use the technology and its performance against a host of tasks is solid (and will only get better).

    There are already TikToks of doctors using the application to requests diagnostics for their patients. And its potential to offload non-clinical, low-risk, routine knowledge work has the potential to unlock real efficiencies for healthcare's administrative work.

    There's always a risk that the technology turns out to be a dud but I want to stake a claim early in 2023 that GPT-3 is going to be a healthcare game changer.

    5 surprising things we learned after a year of conducting international research

    image

    At the end of 2021, Advisory Board's international research team took a look at some of the things they were surprised by after a year of conducting research.

    Read more

    Have a Question?

    x

    Ask our experts a question on any topic in health care by visiting our member portal, AskAdvisory.