Medvale – December 21, 2024
As we approach 2025, the healthcare industry is bracing for a wave of regulatory, financial, and operational changes, all shaped by the aftermath of the latest political developments. In a recent panel, experts shared their insights on the shifting terrain and what healthcare leaders should focus on in the coming years.
The Impact of Policy and Regulation
The biggest concern across health systems, particularly post-election, revolves around funding cuts and new strategies aimed at saving money. As discussed by Ken Segel, CEO of Value Capture, while healthcare may not be the immediate priority of the administration, shifts in government spending and regulatory adjustments will deeply affect the industry. One key issue is the potential cuts in Medicaid and changes in Medicare Advantage. The repercussions could be substantial, especially in terms of revenue models, with the likelihood of some programs transitioning to block grants and others seeing adjustments in their subsidies.
However, the biggest regulatory shift that health systems need to be prepared for is the push towards value-based care. With the aim of controlling healthcare costs while improving patient outcomes, the transition from fee-for-service to value-based models will continue to be a hot topic, and healthcare providers must strategize to ensure they meet these new expectations.
Want to dive deeper into these topics and hear more from healthcare industry experts? Click here to watch to the Medvale Flash Lyceum, where we explored the most pressing issues and innovative strategies shaping the future of healthcare.
The Financial Shift: Opportunities in Dealmaking
On the financial front, the panel discussed the thawing capital markets and the expected surge in dealmaking for healthcare businesses, particularly with private equity firms eager to invest. Neil Johnson, managing partner at Lawrence Evans & Company, emphasized the availability of capital but noted that valuations have become more volatile. The wave of deregulation is anticipated to spark further consolidation in the healthcare sector. For smaller practices, particularly those in rural areas or offering specialized services, the need to adapt to these trends and explore strategic partnerships is more critical than ever.
For independent healthcare providers, such as Wade Erickson, MD, of Medical Network of Alaska, understanding the shifting contracting models and keeping an eye on new opportunities in Medicare Advantage will be key. In the face of challenges like workforce shortages and labor inflation, Wade’s focus is on leveraging value-based contracting as a way to raise revenue while adapting to the changing healthcare landscape.
Innovation and Emerging Threats
The discussion also touched on the growing role of innovation in healthcare. One area seeing rapid development is in the use of GLP-1 medications, which have shown promise not only in treating diabetes but also in addressing obesity, heart disease, and possibly even Alzheimer’s. While these drugs could revolutionize treatment, their high costs present a major challenge for healthcare systems and insurance providers. How these treatments are integrated into healthcare reimbursement systems—particularly in value-based care models—remains to be seen.
However, not all advancements are without risk. Harry Leider, a former CMO at Walgreens, raised concerns about the erosion of trust in science, especially in the face of potential regulatory rollbacks. The panel agreed that while deregulation could boost business, it carries the risk of compromising patient safety, as evidenced by the infamous Theranos case, which shook the foundations of medical technology and regulatory oversight.
Looking Ahead: Strategic Considerations for Healthcare Leaders
As healthcare leaders and executives look ahead, it’s clear that 2025 will be a year to navigate uncertainty. From managing regulatory changes and evaluating new reimbursement models to embracing the role of innovation while managing costs, healthcare providers need to stay ahead of the curve. The focus on operational excellence, primary care, and preventative measures will be essential for thriving in a rapidly evolving industry. For those in the healthcare industry, now is the time to refine business plans, prepare for potential regulatory shifts, and explore new opportunities to ensure sustainability and growth.
Watch now for expert insights, forward-thinking discussions, and actionable takeaways to navigate what’s next!