How Tech Will Impact Healthcare in 2023
There’s no denying that the coronavirus pandemic changed our lives forever, most notably the healthcare sector. Technologies that sounded like science fiction a decade ago became mainstream overnight, transforming where and how healthcare is delivered in astounding ways. From telehealth to artificial intelligence to IoMT, technology adoption was at an all-time high between 2020 and 2022, signaling hope that a new dawn for the sector had indeed arrived.
Fast forward to 2023, and the adoption rate for healthcare tech is far from impressive—if anything, it’s slowed down considerably. We believe it’s due to four fundamental reasons:
- A sharp decline in digital health funding
- Increased volume of targeted, high-impact cyberattacks
- A drop in telehealth utilization
- Growing concerns over the privacy of sensitive medical data
From a technology perspective, one would think that the U.S. healthcare sector is poised for a difficult year ahead. That’s not going to be the case, though. Despite investors being cautious, we still expect funding to be available for startups. Telehealth and health data privacy could have their standards raised, and AI might finally reach a point of real-word utilization.
In this article, we’ll take an incisive look at how technology will shape healthcare in 2023.
Digital Health Getting Back to the Basics
When digital health funding hit its peak in 2021, reaching a record $59.7 billion, it was primarily because investors were prioritizing risk over safety. This year, it’ll be the complete opposite, and recent market upheavals have had a huge part to play in that. For health tech, this means only one thing: an inevitable return to the basics.
Even if slightly, digital health funding may still experience a decline, but the levels should stabilize a bit more compared to 2022. As venture capitalists become more selective in their investment endeavors, only companies that have a clear path to profitability free will attract keen interest. It’s been a tough past few months, and now more than ever, VCs are putting their money where their mouths are. So while growth is crucial, companies in need of funding must strike a better balance between growth and path to profitability.
Obviously, some companies have the upper hand in the race for funding. Specifically companies with:
- Robust growth curves
- Track records of stability
- Fair valuations
- Mature business models
Key areas of funding won’t be much different from the previous year. Mental and behavioral health, in particular, will continue pulling in dollars. Although this space is brimming with multiple companies, payers and employers are still looking for a little hand-holding. Femtech and family planning will also attract funding, especially now that the focus in women’s health has accentuated on the back of the recent landmark ruling in Dobbs vs. Jackson Women’s Health Organization.
As expected, the adoption of tools by healthcare companies won’t be any quicker than last year. If anything, it’s going to be much slower. That’s because payers and providers are forced to be extremely careful when choosing who to work with amid ongoing financial strains. Besides, the plethora of point solution companies in the market today simply cannot be ignored.
As for where payers can channel resources, it’ll likely be in care coordination and physician enablement. In the meantime, providers will focus on investing in tools that automate administration tasks and supercharge revenue cycle management.
For digital health companies that are on the lookout for a solid near-term opportunity, there’s no better place to look than the provider wallet. The current macro environment might be difficult, but hospitals and clinics are still adopting digital health technologies at a steady rate to revamp their workflows.
Whilst opportunities exist, digital health startups won’t have an easy ride this year. Consolidation and layoffs are likely outcomes as it becomes much more difficult for point solution companies to run as independent entities. Additionally, down rounds will likely take center stage as companies slowly come to terms with the fact that funding isn’t exactly easy to come by.
Telehealth Moves Into ‘High-Value Care’ Territory
The use of digitally delivered care has been on a steady fall since it peaked in mid-2020. In a recent 2022 poll conducted in the US, 38% of clients had care done by using telehealth applications, representing a 10% drop from the previous year. Despite these sobering statistics, chances are excellent that telehealth will continue to grow. This time though, the focus will be more on virtual care for chronic needs and less on urgent care visits.
Yes, consumers are not using telehealth as much as they did during the pandemic. While that’s an unfortunate reality, it’s being offset in a considerable way by a sharp rise in the way clinicians are utilizing telehealth. As we speak, telehealth is quickly becoming a common feature in longitudinal and chronic patient care, which, truly, is “high-value care.” By high-value care, we mean care that makes a real difference in patient outcomes and quality of life, not merely treating flus and other fickle ailments.
Virtual care will be held to high clinical standards this year. Volume will cease to be the point of emphasis, with focus shifting to safety and quality instead. Early 2022, telehealth standards came under heavy criticism and scrutiny, with some companies investigated for possible controlled substance violations.
Meanwhile, the number of digital health point solutions in the market is expected to drop significantly, as consumer expectations continue to shift and economic pressures bite harder. It’s possible that there won’t be half as many solutions in a few months’ time.
Care navigators also face an uncertain year ahead. While these experts play a crucial part in helping people get the right help from the right health professional, they don’t provide actual healthcare. In 2023, employers will settle for vendors who address a problem rather than forward the need to another party.
An Inflection Point for Artificial Intelligence
Imagine if we could predict and mitigate public health disasters, predict disease burden at population level and implement preventative measures to reduce deaths and hospital admissions, provide personalized treatment for every individual at a fraction of the cost, or dramatically cut down the cost and time of drug discovery. AI has created the possibility of achieving all these and more, which were touted as wishful thinking not so long ago.
Now imagine the impact it could have on an $808-billion US healthcare industry with CAGR of 16%. It is, quite frankly, phenomenal.
Despite the enormous potential that AI holds for healthcare, its adoption in the real word has been quite slow. Most of the algorithms that feature prominently in research literature are nowhere to be found on-ground. The good news is, more evidence could surface this year, which will ultimately propel healthcare systems along a new trajectory.
It won’t be cookie-cutter evidence, though. We’re likely to see high-quality evidence emerge about the impact of artificial intelligence and machine learning on actual health processes and on health outcomes.
There are a range of attitudes towards AI, with the most popular one being that AI will replace physicians and nurses and thus save money. That couldn’t be further from the truth. Where AI is utilized, it’s been shown to act as a partner in improving care quality, mitigating risks, and reducing burnout. We’ll start to see real examples of that as the year unfolds.
As of November 2022, The Food and Drug Administration had already approved more than 520 medical AI tools. More device authorizations are set to be completed in the next few months. Clearly, AI in healthcare is moving past the hype and closer to becoming the standard of care.
For providers, the quick approval of AI devices by the FDA presents an ideal opportunity to integrate AI into their processes to uses in patient engagement, clinical decision support, and revenue cycle management.
Payers have not been left behind in the AI conversation either. Among other ways, they could leverage the data they collect to advance value-based care, personalize member engagement, and support medication adherence. This would prove particularly valuable at a time when healthcare companies are finding it difficult to align consumer expectations with the reality of the healthcare experience.
Cybersecurity Climbs Up the List of Priorities for Healthcare Organizations
More health tech adoption means more attack surfaces for cybercriminals to exploit. Sad a reality as this may be, it urgently and inevitably demands a more proactive approach to healthcare cybersecurity.
For instance, according to a recent survey, more than one in three healthcare organizations around the world reported being hit by ransomware in 2020: and there’s little indication of any slowdown. Another study conducted in 2021 found that attacks against health plans rose nearly 35% from 2020 to 2021. In addition, there was a rise of 14 million total victims of healthcare attacks in 2018 to 45 million in 2021.
In light of these rising incidents, healthcare companies will strive to give their cybersecurity budgets a boost in 2023. The government will also swing in aggressively to combat healthcare cyberattacks. While federal law enforcement agents have previously gone on offense against such attacks, we will witness them taking the fight a notch higher.
Policymakers won’t take a back seat, either. As biometric and AI-driven tech continue to pervade the healthcare realm, they may need to act quickly to formulate and enact comprehensive federal data privacy laws. They’ve been long overdue, in all honesty.
To sum it up, the issue of data protection and trust will dominate conversations in 2023, prompting healthcare organizations to do everything they can to alleviate patients’ concerns. Patients are alert to the fact that their sensitive medical data may be collected and used dubiously, so they’ll be expecting nothing short of timely and affirmative preventative measures in that regard.
Looking Ahead: Fully Embracing Change
The contents of this article may seem uncomfortable, probably even scary. But that’s the reality we’re in. The earlier healthcare organizations buy in to the technological changes that are bound to happen in 2023, the easier it’ll be for them to maneuver any challenges that may pop up along the way. Fully embracing innovation and cutting-edge tech is the key to unlocking a brighter future of higher quality care that is accessible to all.
When it comes to acquiring customized, clear coverage plans that exceed you and your family’s needs, there’s only reliable name in the game: HST. Healthcare Solutions is a wholly-owned subsidiary of the National General Insurance Group, so rest assured you’re getting quality service. For more information, contact us today, and our teams will be more than willing to help.