6 Healthcare Insights from Q4 2023 and What They Mean for You

According to Indeed.com, the growth rate of open physician and surgeon job postings continues to decline as labor markets shift toward being more employer-friendly versus employee-friendly. The loosening labor market has caused wage growth for physicians’ offices to fall below national and industry averages. Although patients’ interest in physicians’ services is still high compared to pre-pandemic levels, that number has started to decline. According to Google Trends data, searches for “primary care near me” have gone down on the search engine.

On a positive note, patient visits are increasing. Technology will continue to grow in importance as artificial intelligence (AI) will impact the healthcare industry through more productivity and efficiency, with forecasts predicting a 37.5% annual growth rate between now and 2030. Investment in tech has been a key driver of healthcare consolidation with recent merger and acquisition (M&A) activity returning to more normal levels, as dealmakers grow more cautious about higher financing costs and economic uncertainty.

Here are the top six takeaways to keep in mind heading into next year.

1. The jobs market has become more favorable for physicians’ offices.

The growth rate of open physician and surgeon job postings grew only 9.1% year-over-year, continuing to decline from its 2021 heights; however, the growth rate is still higher than the national average, as it has been since early 2022.

Key takeaway: The declining growth rate of physician and surgeon job postings indicates that the quit rate has slowed. This gives employers greater leverage in negotiating fairer wages since job seekers’ options may be more limited.

2. Looser labor markets are pressuring healthcare wages.

Healthcare wage growth rates for physicians’ offices are lower than both the national average and the overall healthcare industry, sitting near pre-pandemic levels. Due to this trend, inflationary pressures are subsiding.

As supported by the prior chart, loosening labor market conditions have impacted declining physician and surgeon practice wage growth quickly.

Key takeaway: Healthcare workers should pay attention to larger labor market conditions when negotiating wages with existing or potential employees. If markets loosen, physicians’ offices can more effectively manage salary expenses for staff members, positively impacting profitability. In contrast, if markets tighten, healthcare workers should explore non-financial benefits, such as staffing flexibility, to retain and attract employees.

3. Google searches for primary care continue to decline.

Google Trends data shows that the number of searches for “primary care near me” continues to decline off the post-pandemic peak in 2021. However, the level of interest remains relatively high as searches are still above pre-pandemic levels.

Key takeaway: With the pandemic driving population migration, many patients sought new primary care doctors as they moved to different areas of the country. With their lives more settled, patients’ interest in new primary care physicians has decreased. Yet the pandemic created more work flexibility, meaning that physicians’ practices may experience more patient turnover than they have historically. As a result, physicians must maintain an active online presence with strong SEO positioning and online reviews.

4. The number of visits to the physician’s office continues to climb.

Despite Google searches for primary care doctors decreasing, the number of patient visits continues to climb, as post-pandemic society has become more health-conscious and telehealth technology has increased the flexibility of physicians’ offices.

Key takeaway: With the pandemic leaving people more attuned to preventative healthcare, healthcare workers should expect the number of patient visits to remain elevated. To accommodate the higher demand, look for ways to affordably scale your practice. For example, try employing more technology, such as telehealth, and hiring staff, such as nurse practitioners and physicians’ assistants, at more competitive wages given the more favorable job market conditions.

5. AI in the US healthcare market is set to grow exponentially

AI has taken the world by storm with extraordinary growth over the past year. For businesses, AI presents tremendous opportunities to drive greater productivity, and thus, profitability. Forecasts suggest that this is just the beginning, with AI in healthcare expected to grow at 37.5% a year until 2030 and become a $208 billion industry.

Key takeaway: To stay competitive, it is imperative for physicians to incorporate AI into their practices to increase productivity and scale cost-effectively. Look for AI solutions that your staff can easily adopt and apply to your practice, such as tools that automate administrative processes or x-ray diagnostics.

6. M&A activity in the healthcare space subsided last quarter.

Following significant consolidation in 2021 and 2022, M&A activity has slowed to more historical levels, as the increased cost of financing and higher economic uncertainty have made dealmakers more discerning.

Key takeaway: With the M&A market cooling, healthcare workers and practice owners should shift their focus toward driving organic growth. To remain competitive and scale your practice, be more open to adopting new technology and tools (particularly AI) and enhance flexibility for your patients with telehealth and payment options.

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