By Wendy Gerhardt, senior manager, Deloitte Center for Health Solutions, Deloitte Services LP
It is hard to believe Thanksgiving has already come and gone and there is just one month left in the year. I suspect that 2022 will be remembered as the year COVID-19 finally faded as a major public health issue. But the pandemic left an indelible mark on health care and life sciences organizations. It contributed to supply chain challenges, shrinking margins for hospitals and health systems, clinician burnout, and a tight labor pool for many industries. US health systems are still recovering from low patient volume and revenue shortfalls linked to COVID-19. But the pandemic also helped to advance the use of virtual health and digital technologies, pushed organizations to collaborate in new ways, shifted how people engage with the health care system, and inspired strategies for making health care more accessible and equitable.
The Deloitte Center for Health Solutions published some important research in 2022 that evaluated many of the trends that affected and continue to shape the health care and life sciences sectors. Here is what I see as the top 10 issues of 2022:
- Inflation: In the US, inflation reached a near-40-year high this year. While inflation is affecting many industries, the impact has rippled throughout the health care and life sciences sectors (see The ills of inflation may make consumers and the health system sicker). The rising cost of goods and services is also influencing many of the decisions made by health care consumers. Our 2022 Pulse Survey found that consumers are showing signs of inflation fatigue. Nearly 30% of our respondents (which translates to roughly 72 million US adults) said they feel less prepared to pay for unexpected medical costs than they did last year (see our new report, Inflation’s impact on health care). Global inflation, high energy costs, ongoing COVID-19 lockdowns in some Chinese cities, and the Russia-Ukraine war have impacted the cost of raw materials and disrupted essential supply chains used by health care organizations and life sciences companies (see supply chain bullet below).
- Clinician burnout: The pandemic caused financial devastation for many hospitals and health systems, and they are also dealing with significant challenges in attracting and retaining staff. (See our report, Employee health contributes to organizational health). Employment in the health care sector has dropped by 524,000 since February 2020, and about 16% of hospitals have reported critical staffing shortages. The workforce is increasingly burned out, overworked, and unfulfilled. Many clinicians are leaving their jobs; some have left the profession entirely. There is often a major disconnect between the workforce and the leadership of health care organizations. Only 23% of clinicians from our survey trust their organization’s leadership to do what’s right for workers (see our new report, Addressing health care's talent emergency).
- Health inequities: Health equity is defined as the fair and just opportunity for every individual to achieve their full potential in all aspects of health and well-being. But look at nearly any disease state—from diabetes to heart disease to mental health—and you are likely to see differences in prevention, early detection, access, and treatment quality tied to three key inequities: socioeconomic (including class), race/ethnicity (including culture and language), and gender. Based on our analysis of several high-cost diseases (e.g., breast cancer, diabetes, colorectal cancer, asthma, cardiovascular disease) we determined that health inequities cost the US $320 billion a year. (See our report on the Economic cost of health disparities.) In 2022, we saw health systems and health plans take steps to make health care more accessible and equitable (see Can a health insurer make health more equitable?)
- Real world evidence: Most biopharmaceutical companies are now using real-world evidence (RWE) for decision-making across the lifecycle of their products, according to our latest research (see Real-world evidence's evolution into a true end-to-end capability). For example, RWE combined with data from clinical trials made it possible for companies to assess the impact of COVID-19 therapies and vaccines more accurately. We also found that AI-enabled RWE generation is picking up pace, and major regulatory agencies also have stepped up their efforts to advance RWE use in regulatory submissions, further expanding its importance.
- The transforming care model: It has been more than a decade since the Affordable Care Act was enacted, but it seems like the health care sector reached a true tipping point in 2022 (see Redefining how health care is delivered). Much of the research we conducted this year points to some significant changes to the traditional care model. The pandemic created the business case for care to be delivered outside the walls of a hospital. Many health systems are now investing in meeting patients where they are, whether in their homes via virtual health, or in convenient locations, such as outpatient community-based care sites. Many hospitals and health systems also are incorporating digital technologies into a wide range of areas. Digital solutions could help hospitals and health systems transform their relationship with their customers and reduce some of the paperwork that can lead to staff burnout (see Clinician burnout above).
- The ROI of R&D: After a decade of consistent declines, the pharmaceutical sector has been rebounding, according to our analysis of projected research and development (R&D) productivity. This year, we saw continued collaboration among companies and greater reliance on digital technologies. For example, some life sciences leaders are starting to use cloud technologies to drive R&D, commercial functions, and patient engagement. Many of them are also broadening their partnerships with hyper-scalers to adopt industry-optimized platforms and business capabilities. However, our research also indicates that the life sciences sector still has a way to go in taking full advantage of technology for R&D. (See Measuring the return from pharmaceutical innovation.)
- Supply chain: Getting necessary supplies and materials had a significant impact on the health care and life sciences sectors this year. Shortages of semiconductors in many industries forced some medical device manufacturers to implement new strategies to keep their production lines moving (see How is the Semiconductor Shortage Affecting Medtech?).
- Collaboration: The pandemic helped to inspire many organizations to work more closely together to address challenges. Some hospitals and health systems, for example, are forming closer relationships with organizations in the communities they serve (see Advancing health equity through community-based ecosystems). Pharmaceutical companies that had historically been competitors learned the value of collaboration. As pharmaceutical companies raced to develop vaccines and therapies to prevent and treat COVID-19, some companies established channels through which competitors could access and mine their data. These organizations learned that this type of collaboration can enhance their competitive advantage rather than hinder it.
- Empowered consumers: As consumers take on a bigger role in their own health, their expectations are changing. Consumers have become increasingly interested in high-quality care, convenience, and lower costs, according to our research. (See Transforming how physicians practice and consumers engage.)
- Clinical trials: Pharmaceutical companies have been trying to attract a broader group of patients to clinical trials for years, but 2022 was a year they started to make noticeable progress. Not everyone responds the same way to medicines and vaccines. A patient’s race, ethnicity, age, and gender could all influence how well a drug performs. However, just 35% of consumers are willing to participate in clinical trials at a traditional research center, according to our survey data. In an effort to improve the diversity of their clinical trials, some pharmaceutical companies are working with retail pharmacies and grocery store pharmacies (see Retail clinics may be the next frontier for clinical trials).
There is no doubt that 2022 was an important year for health care and life sciences organizations. In the weeks ahead, Deloitte’s health care and life sciences leaders will offer their perspective on what to expect in 2023.
Watch our 2023 Life Sciences and Health Care Outlook Dbriefs webcast on-demand.
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