In 2024, health systems in the United States face many problems that affect how they work and how patients feel about their care. Costs to run hospitals are going up. There are not enough workers, especially nurses. Rules keep changing, and new kinds of competitors are entering the market. Hospital leaders, doctors, and IT teams need to think about how technology and managing money can help hospitals work better while still caring for patients.
This article looks at how health systems can handle these problems by using advanced technology and good money management. It focuses on artificial intelligence (AI) and automation, which can help both office work and medical services.
According to S&P Global and McKinsey, health systems made 12.5% more money from 2021 to 2022. But their operating expenses grew even more, by 17.2%. This means they are spending faster than they earn. For nonprofit health systems, the average cash kept for emergencies dropped from 250 days in 2021 to 209 days in 2022. This shows less cushion for unexpected problems or higher costs.
Another big issue is the shortage of healthcare workers, especially nurses. By 2025, there might be 200,000 to 450,000 fewer nurses available. This is about a 10-20% shortage. This makes it harder and more expensive to take care of patients. Higher wages for nonclinical jobs and inflation make costs go up even more.
Also, new rules about price transparency mean hospitals must share clear and accurate cost information with patients and payers before service. This means hospital offices have to change how they operate.
On top of this, hospitals now face more competition from nontraditional providers who focus on cutting the total cost of care. The number of people in value-based care programs is expected to grow from 130 million to 160 million by 2027. Hospitals must learn new skills in managing risk and coordinating care to compete well.
Managing capital well is very important for hospitals to stay financially healthy while investing in technology and staff. The drop in cash reserves means hospitals must carefully plan how they spend money.
Many health systems are working on cost-saving projects. These focus on making clinical work more efficient, improving patient access, and keeping workers during shortages. For example, hospitals are lowering supply costs and improving revenue cycle management with new technology.
There is also more merging and buying among health systems, which grew by 42% since 2010. These deals help hospitals have more sources of income and be stronger against market ups and downs. Investing in outpatient services and ambulatory surgery centers is another way to earn more money, since inpatient care is getting more expensive and regulated.
Hospital leaders must carefully decide where to invest, balancing short-term money problems with the need to update infrastructure and grow patient services.
Technology is playing a bigger role in fixing operational problems and meeting patient needs. Tools like cloud computing, AI, and automation are becoming necessary to make processes easier and improve both business work and clinical results.
Top healthcare IT companies like Oracle Health and IBM offer cloud-based systems with AI. These connect data from different parts of the hospital for better clinical and financial management. They provide almost real-time data to help with decisions and daily operations.
For example, Oracle Health’s tools combine clinical, payment, and public health data. This helps different departments, payers, and patients share information smoothly. It removes barriers in communication and improves care coordination.
IBM’s cloud and AI platforms help hospitals handle workloads better by combining old applications with new AI tools. This allows digital changes without stopping current clinical work.
AI-driven automation has clear benefits in areas like revenue cycle management. It cuts down the work needed for billing, claims, and registration. This helps bring in money faster and reduces mistakes.
Patients today want more than good medical care. They want easy ways to communicate and use services. This has created demand for systems that help with everything from booking appointments to checking in after care.
McKinsey says health systems need to meet patient demands by using digital tools for self-scheduling, reminders, and personalized health support. These tools not only make patients happier but also help hospitals work more efficiently by lowering missed appointments and improving use of resources.
Technologies that personalize outreach using AI—like patient reminders and direct chats with care teams—improve how care is coordinated. Oracle Health’s AI can send custom messages and follow-ups, which keeps patients involved and helps them stick to treatment plans.
Since value-based care models are growing, improving patient experience through technology also helps hospitals measure outcomes and manage risks. This is important for future payments.
AI and automation help reduce office workloads and improve clinical tasks. They are key to managing staff shortages and rising costs, especially in jobs that used to need people to do repetitive work.
For example, Simbo AI creates phone systems that use AI to handle patient calls with little human help. This reduces missed calls, makes scheduling better, and allows staff to focus on other important tasks. Automated answering means patients get faster responses, increasing satisfaction and reducing bottlenecks.
AI clinical tools, like Oracle Health’s smart EHR assistants, help doctors by automating routine notes, giving quick access to patient info, and lowering mistakes. These tools reduce burnout and improve care.
IBM’s AI chatbots show how call volumes before appointments can be cut. Humana used this to lower costs and reduce provider stress. AI virtual helpers give patients support anytime, answering common questions and guiding them through care.
Automation also improves revenue cycle management by speeding up claims from registration to billing. AI finds errors early, helps get payments faster, and improves money management. These changes are critical as hospitals face tighter budgets and more value-based care payments.
AI also helps protect patient data and hospital systems from cyberattacks. AI-powered security detects threats quickly and speeds up responses, keeping data safe and helping meet regulations.
By using technology and managing capital carefully, U.S. health systems and medical practices can adjust to financial and operational challenges. Using AI and automation is helping hospitals work better and improve patient care even with limited resources.
Health systems are contending with increasing competition from nontraditional players, workforce shortages, rising labor costs, demands for new capabilities, and the financial imbalance from expenses exceeding revenue.
Post-pandemic, health systems’ financial performance is diverging, with some improving by focusing on resilience, efficiency, and growth strategies, while others struggle with pressures from operating expenses.
Price transparency compliance is a pressing regulatory requirement, influencing operational practices and financial strategies as health systems adapt to consumer demand for cost clarity.
Consumers expect omnichannel experiences and digital tools, forcing health systems to upgrade their capabilities and enhance patient engagement to remain competitive.
The number of value-based care lives is projected to grow from 130 to 160 million by 2027, requiring health systems to develop new risk-bearing capabilities.
Health systems need to be intentional in capital deployment to optimize financial performance amid increasing costs and decreasing cash reserves.
Many health systems are initiating extensive cost transformation programs focusing on clinical operations, patient access, and talent retention while seeking efficiencies through technology.
Health systems are focusing on end-to-end process improvements and selectively deploying technologies aimed at enhancing patient experiences and operational efficiency.
The healthcare sector is witnessing significant M&A activity, with a 42% growth since 2010, primarily characterized by cross-geography deals aimed at building shared capabilities.
Operating expenses have been increasing faster than revenue, leading to negative ratings actions by agencies and highlighting the urgent need for financial restructuring and innovation.
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