The State of the Healthcare Industry 2023
A pulse check on the opportunities, challenges, and predictions
In the three years since we published our inaugural report, healthcare has undergone significant change and transformation. Providers navigated the pandemic—and all the loss, collective grief, and uncertainty that came with it. They quickly adopted new technologies and ways of delivering care, and were forced to adapt in the midst of an economic downturn and workforce challenges. Along the way, they also gained valuable insights into how consumers want to engage with their healthcare.
Over the past year, we’ve seen patient volumes continue to rebound, and they show no signs of slowing down. Given an aging population, a heavy disease burden, and the demand for mental health services, certain specialties and sub-sectors will only continue to grow. While staffing shortages persist and impact the industry as a whole, as people return to work, private practices, in particular, have experienced some relief.
Still, the ever-changing dynamics and market shifts in healthcare mean inherent challenges for providers. Declining reimbursement rates for Medicare, Medicaid, and commercial insurers, as well as lower pay rates for providers not affiliated with health systems, will make it challenging for practices to stay ahead.¹ Additionally, with the continued rise of healthcare consumerism, self-referrals are slowly replacing physician referrals as patients find their providers via search, digital ads, platforms, and social
With this new survey of key healthcare decision-makers, we set out to understand how private practices fared in 2022 and the key trends they anticipate will shape the marketplace. We wanted to know whether these leaders were optimistic about the year ahead, key challenges, drivers of growth, and what’s next.
Many of the results were surprising, including nearly 50% of respondents who said they were likely to pursue a private equity transaction. That’s good news, given that global private equity firms hold nearly $1.8 trillion in dry powder.²
We invite you to explore the insights in this report and share them with your team and colleagues. We hope that the findings will be useful and inform your business growth over the upcoming months and beyond.
1. Strazewski, L. (2022 February 21). 8 threats facing physician private practices. American Medical Association. https://www.ama-assn.org/practice-management/private-practices/8- threats-facing-physician-private-practices
2. Herschman, G. & Torres, H. (2020 November 14). Private Equity Partnerships in Orthopedic Groups: Current State and Key Considerations. The Journal of Orthopaedic Experience & Innovation. https://journaloei.scholasticahq.com/article/17721-private-equity-partnerships-in- orthopedic-groups-current-state-and-key-considerations