As the healthcare industry prepares for a possible recession and an acceleration of economic headwinds, leaders will need to adjust to make healthcare more affordable for consumers, said Ash Shehata of KPMG.
Shehata, national sector leader of healthcare and life sciences for KPMG, made these comments Tuesday during a Twitter Spaces session on next year’s key trends in the technology and health sector.
Here are three macroeconomic trends Shehata is following in 2023:
- The continued impact of inflation
With inflation expected to ramp up, healthcare industry leaders will need to find ways to relieve cost pressures for consumers, and one way to do that is with technology, Shehata said. Insurers from 55 countries expect healthcare benefit costs to increase by 10% on average in 2023, according to a recent Willis Towers Watson report.
“I think you’re going to see a lot of our healthcare and life sciences clients look toward technology to really deepen the ability to make healthcare more affordable, whether it’s health systems staffing hospitals with very precious resources, or it could be health insurers really building better consumer capabilities,” he stated.
- Investments will keep flowing, but will be more pointed
While Shehata expects funding in healthcare to endure in 2023, the uncertainty in the market is going to require more strategic investments, he added.
“We think the investments are going to continue to be relatively strong compared to other sectors, but they’re going to be very targeted,” Shehata said. “It’s going to be areas that will drive consumer demand, improve research and development, focused on delivery capabilities to providers. Those are going to be the areas that we’re going to look to as the capital markets continue to see uncertainties due to the impact of interest rates.”
- The effect on the consumer
As prices continue to rise, consumers will be struggling financially, Shehata said. The healthcare industry will need to keep an eye on this and really prove the value and affordability of their services.
“As we’ve seen in all other aspects of life, commodity prices are going up,” he said. “We’re going to start to see the impact on the consumer wallet going into next year. So when we talk about these solutions, we have to find ways to make it explicit that we’re delivering higher value and lower costs, just like we’re seeing in other aspects of consumer spending.”
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