6 Healthcare Insights From Q4 2022 and What They Mean for You
December 14, 2022
With the global economy battling a large inflationary wave, the healthcare industry has faced its own challenges of wage inflation and increased operating costs. Yet more recent data provides silver linings: the healthcare jobs market appears to be improving, which may subdue the inflationary pressures healthcare providers have experienced. Despite rising costs, the demand for healthcare has increased as data around in-person and online visits remains strong. The pandemic also spurred merger and acquisition (M&A) activity to build economies of scale; to remain competitive, healthcare providers are changing their business models by incorporating greater uses of technology and data.
Here are six key trends to watch as we look forward.
1. The healthcare jobs market is improving with more hiring and fewer employees quitting
Growth rates in job openings are slowing while job quit rates decline. For employers, this creates a better hiring environment.
Key takeaway: The healthcare jobs market remains robust. As labor conditions loosen, employers should start to be able to negotiate more balanced compensation packages. Since the economy may slow down, employers should look to lower overhead costs by negotiating fairer wages with new and existing employees.
2. Healthcare wage growth continues to climb despite the loosening labor market
Wage growth in the healthcare field has accelerated quickly to its highest rate in over a decade. However, with decreasing quit rates, competition for employees is diminishing and may ultimately restrain wage growth from rising further.
Key takeaway: A looser labor market typically puts downward pressure on wages, causing wage inflation to subside. With the appearance of a potential inflection point in labor and wages, look to optimize your overhead costs with the optimal number of employees and fair remuneration.
3. The number of patient visits continues to climb steadily
After in-person visits declined during COVID-19 quarantines and patients moved to telehealth, interest around in-person visits is growing again, as patients’ mindsets around preventative and integrative health change.
Key takeaway: In a post-pandemic world, people have become more attuned to preventative health. Consequently, we have seen a large and steady rise in patient visits after COVID-19 first began. Given this increase in demand for physicians, look to adapt with more integrative healthcare practices.
4. Rising interest in biometrics
As consumers have become more data-oriented and health-conscious, interest in biometrics and remote patient monitoring technology has increased substantially over the past 7 years.
Key takeaway: With a wave of wearable smartwatches and apps that can track heart rate, net calories and more, people are now becoming increasingly interested in their own biometric data. To stay competitive with online biometric providers, provide similar solutions, such as remote blood glucose monitoring for diabetic patients or regular blood work for those looking to optimize their health.
5. M&A activity has reverted to more normal levels in 2022
M&A in the healthcare space surged in 2020 and 2021 but declined to more normal levels in 2022.
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About the Author
Simeon is the Chief Investment Officer of Aprio Wealth Management and the Director of Aprio Family Office. Simeon brings two decades of professional investing experience in publicly traded and privately held companies, as well as senior-level operating and strategy consulting experiences.
Scott is a Tax Partner on Aprio’s National Healthcare Practice team, where he advises dental and medical practice owners to help them deliver results and achieve their goals. With more than 30 years of public accounting experience, he specializes in strategic tax planning, cash flow and working capital management, profitability and compensation consulting, and succession planning.