Healthcare Issues to Watch for in 2022

After two years of the COVID-19 pandemic wreaking havoc, the healthcare industry continues to navigate its impact. We’ve noted several issues to keep an eye on as it continues affecting practices and facilities.

The Labor Market

Healthcare has been hit especially hard by the labor shortage. Healthcare workers are facing longer hours than ever before, because people still need medical care after the pandemic created additional demands. These workers are stressed and burned out; as a result, they’re reassessing options and craving better work-life balance. They may be able to make better money in other settings or industries.

With these issues at hand, hiring and retaining workers in key roles and settings is vital.

What You Can Do – You’ll need short- and long-term labor solutions. This can include adjustments to pay, studies of compensation and similar considerations, plus outsourcing when needed. Improving workflow and reimbursement policy can help with long-term needs.

Behavior and Mental Health

COVID-19 has impacted mental health significantly, with burnout and early retirement becoming more common when healthcare workers are needed most. Combined with two years of remote work and education, fear of the disease and isolation from family, the pandemic is having a terrible impact on mental health.

What You Can Do – Payment and availability for mental health programs has been broadened by the federal government. This includes telehealth avenues and reimbursement for substance use disorders. Nursing homes are using creative options such as video conferencing to reconnect patients with family and friends. Continued improvement in behavioral and mental healthcare for employees, employer-supported wellness options, mental health rest days and other resources can also help.

Antitrust and Oversight Compliance

Hospital mergers, staffing, private equity and nursing homes are all under scrutiny, with President Biden’s July 2021 Executive Order focused on improving competition. The DOJ and FTC are preparing to review merger guidance, seek feedback and make changes. Consider the deal between Optum and Change Healthcare coming under DOJ scrutiny or the 200 congressional members asking regulators to investigate price gouging by temp agencies.

What You Can Do – Assess your risk management, compliance, internal auditing, cybersecurity, IT strategy, consulting, transaction services and similar aspects to ensure they’re at the top of their game.

Economy and Inflation

The economy has been on a bumpy ride during the pandemic. Record-breaking inflation and major shifts in the stock market are causing even more problems to the economy. The Federal Reserve has mentioned increasing interest rates to offset inflation. However, labor issues and clinical professionals leaving the healthcare industry are also having their impact.

What You Can Do – Investment returns help fund capital and ongoing activities in healthcare, so market declines put pressure on these earnings. Combined with rising inflation, much-needed cash flows are impacted. Modeling financial scenarios help you prepare for more trouble ahead.

Influence of Private Equity

Expect increased private equity activity in 2022 including digital health, physician practices and senior living as a continuing trend from the past decade. Private equity can drive innovation and remove inefficiencies while improving capital. But because it’s focused on generating profits in short-term solutions, it may not meet the long-term needs of the population.

What You Can Do – Undertake preparation, analysis, planning and strategy to determine whether private equity offers are a threat or an opportunity. Also consider whether it might cause antitrust and monopoly issues.

Growth of Medicare Advantage

Medicare Advantage has accelerated as more baby boomers retire, with 40% of enrollees adding the plan. Medicare Advantage provides lower co-pays and premiums with additional supplemental benefits. However, its additional costs over regular Medicare — costing the federal government 104% per capita on average — have attracted scrutiny. Regulators have increased enforcement in cases of “upcoding” beneficiary health conditions and failing to cover mental health services.

What You Can Do – Understanding how these demographic shifts will impact your local, regional and national markets will help you grasp the potential impacts of revisions to the program.

Regulatory and Government Agenda

Congress and the Biden administration are still at odds on major legislation. This has led to the creation of smaller bills to pass. Refilling the Provider Relief Fund will probably be secondary to funding the government. But other targeted changes could take place, including telehealth opportunities. The Centers for Medicare & Medicare Services probably won’t let up on transparency initiatives for pricing, staffing or value-based care.

What You Can Do – Check payment rules, as these will show administration goals. Assess your organization’s position in terms of future growth regarding costs and demographic changes. Consider disrupters, shifting service sites, health equity, social determinants and value-based care models.

How We Can Help

Because we have experts focused on the healthcare sector, we stay on top of these issues on a daily basis. Contact us today to see how we can help you succeed.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.