Healthcare Finance Trends for 2025 Accelerating Change.

January 8, 2025

Healthcare finance trends for 2025: accelerating change.

Healthcare leaders enter 2025 facing a host of pressing imperatives. They need to promote sustainable financial health, address patient affordability and financial experience, strengthen cybersecurity, unleash the benefits of technology innovation, and drive real progress on transforming healthcare’s entire delivery model. These goals are urgent.

Healthcare Finance Trends for 2025 by CommerceHealthcare^® presents the bank’s annual assessment of influential forces driving the current leadership agenda. Recent industry data and perspectives from a wide range of sources have been analyzed. This year’s report captures eight major themes across four planning sectors:

• Financial. Improving financial health is paramount for all providers. Post-pandemic progress is poised to continue in 2025, but the gulf between financially stronger and weaker organizations is likely to widen. While rigorous bottom line discipline will dominate, the search for growth will favor further shift of care to non-acute settings and continued reliance on mergers and acquisitions (M&A).
• Patient financial experience. Affordability remains a persistent problem for many Americans, with negative implications for providers. Demand for more flexible patient financing is growing. Organizations will also elevate their efforts in 2025 to make the overall patient financial experience less fragmented, more streamlined and fully responsive.
• Technology. Finance and revenue cycle management (RCM) functions are a focus of technology investment with process automation, artificial intelligence (AI) and digital payments seeing particular emphasis. Cybersecurity continues to be a strategic and operational overhang that consumes management attention.
• New paradigms. Momentum is building to replace legacy care delivery and business models with truly transformative ones. Many stakeholders see bolder moves as essential to meeting the demands of 21st-century healthcare. Four fundamental elements of the new care model are explored.

Financial conditions improving, but structural issues cloud outlook.

At the industry level, 2024 followed 2023’s positive trajectory on key financial measures. Net hospital operating revenue through September increased 8% over the prior year and 18% over 2021.^{[1] footnote [1]} Median net operating margins stood at 4.3% versus 2.3% in October 2023.^{[2] footnote [2]} Margins for healthcare systems were 1.8% through October, while total inpatient admissions showed a respectable 4.7% rise over the past year.^{[3] footnote [3]}

Notes of caution

These favorable numbers come with several notes of caution:

• Many metrics are below pre-pandemic levels. Moody's points to a median operating cash flow margin that was 8.5% for nonprofit hospitals in 2019 but 5.3% in 2023.^{[4] footnote [4]} Days cash on hand has plummeted from 260 in 2021 to 211 in 2023.^{[5] footnote [5]}
• Cost increases are still outrunning reimbursement rates, an unhealthy long-run scenario. Labor is a primary culprit, but even indirect cost escalators such as readmissions are an issue. The average hospital readmission rate is 14.56%, with some reaching over 22%.^{[6] footnote [6]}
• Analysts describe a serious and growing divergence in the financial well-being of organizations. For the period of June 2023 to May 2024, hospitals in the 60th to 95th profitability percentile had operating margins of 8% to 32%, while those in the 40th percentile or below ranged from 2% to -19%.^{[7] footnote [7]} Rural healthcare is near crisis levels as 360 hospitals are deemed at immediate risk of closure and nine states have the majority of their rural hospitals at risk.^{[8] footnote [8]}

Outlook sees structural concerns

What is the outlook for 2025 and beyond? More improvement on metrics is generally expected. For example, one small CFO survey found that 60% believe operating margins will increase, 36% see them staying flat, and 4% expect a decrease.^{[9] footnote [9]} However, many express concern over intractable problems. Moody’s feels that forward reimbursement increases will fail to cover "the steep rise in healthcare wages over the last three years.”^{[10] footnote [10]} Advisory Board uses the term “structural” to describe labor characteristics such as higher workloads and lingering burnout that yield “slower throughput and reduced capacity” for providers.^{[11] footnote [11]} Fitch avers that there is a ”fundamental disconnect between revenue generation and expense requirements that may be here for the long term” and that “predictive normalcy” is another year away.^{[12] footnote [12]}

Broader economic pressures

Leaders are also apprehensive about national economic and market pressures:

• Healthcare cost escalation. U.S. health expenditures have grown from $2.8 trillion in 2012 to $4.5 trillion in 2022 and are projected to grow to $7.7 trillion by 2032.^{[13] footnote [13]} Employers’ per-worker health benefit costs are expected to rise 5.8% on average in 2025.^{[14] footnote [14]} Industry escalation results from a potent combination of price increases, rising utilization, and the demand for care generated by aging demographics.
• Shifting insurance mix. The percentage of people enrolled in commercial plans was 59% pre-pandemic but will drop to 55% by 2030 as the population ages into Medicare. With around 11,000 people qualifying for Medicare each day, providers will face a significant shift as millions will convert to lower-reimbursement insurance while utilizing more services.^{[15] footnote [15]}
• Labor shortages. Worker shortfalls persist and forecasts suggest a nationwide shortage of 100,000 healthcare workers by 2028.^{[16] footnote [16]}

• Implications of new drugs. “New modality” medications are dominating the pharmaceutical market. Nine of the top 10 drugs in 2029 will be non-conventional (Figure 1).^{[17] footnote [17]} Many of these are expensive, and employers may struggle to maintain coverage. The effectiveness of these drugs and novel gene therapies may also reduce provider revenue from cardiac and other high-volume procedures.

  

  
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New insurance uncertainties add financial risk

Recent proposals and a change in national administration have generated substantial uncertainty about the direction of major health insurance programs. Changes are contemplated for Medicaid and Medicare Advantage that carry potential gains and losses for providers, but several amendments to the Affordable Care Act (ACA) marketplace have been advanced that healthcare organizations worry may have negative financial and care access impact.

The principal concern rests with the expiration at the end of 2025 of the temporary enhanced subsidies that have been in place to help individuals pay for marketplace premiums. It is unclear if these costly subsidies will be renewed. Many rely on this coverage, given that subsidized enrollment has grown from 9.6 million to 19.7 over the past four years.^{[18] footnote [18]}

ACA member reductions could significantly reduce utilization of care and thus decrease provider income. With the median premium increase on the ACA exchanges set to be 7% for 2025, lack of subsidy would put participation further out of reach for many.^{[19] footnote [19]} CMS expects subsidy removal to decrease direct-purchase enrollment by 7.3 million people next year.^{[20] footnote [20]} The Congressional Budget Office sees a net enrollment drop of almost 4 million.^{[21] footnote [21]} Hospital EBITDA margins could decline between 4% and 7%, according to a leading financial analyst.^{[22] footnote [22]}

Another headwind might materialize if the new administration reverses the ruling allowing Deferred Action for Childhood Arrivals (DACA) recipients to enroll in ACA marketplaces. Up to 100,000 new enrollees have been projected, certainly a boost for providers.^{[23] footnote [23]} Litigation to halt the program has already been filed, and the future remains unclear.

The financial balancing act

Today’s financial conditions create a difficult balancing act. Cost-cutting will remain an urgent priority. Margin improvement is a top-three mission for 78% of finance leaders, and one-third aim for increases of three or more percentage points over the next three years — a tall order.^{[24] footnote [24]} Healthcare consulting firms report fast growth in operational and margin improvement services.^{[25] footnote [25]} Focus on the bottom line competes with a need for new investments, many of which will be detailed throughout this report. Nearly half of surveyed leaders say that finances will constrain investment in medical equipment or technology.^{[26] footnote [26]}
 

More care will shift sites to power growth and control costs.

Sustained revenue growth and a viable cost structure are the motivations for the shift of care to a variety of non-hospital sites in recent years. That migration will continue to feature prominently in 2025 strategies, with three key growth vectors.

• Outpatient services. Volume growth is projected to increase 17% over the next decade compared to just 3% for inpatient discharges.^{[27] footnote [27]} All age cohorts will participate, with volume growth of 11% for up to age 64, 14% for 65-74, and 65% for 75 and up.^{[28] footnote [28]} Urgent care centers (UCC) will see solid 2025 expansion. There are over 14,000 UCCs, and a 2023 survey found that 47% of older adults had visited one over the previous two years.^{[29] footnote [29]} Hospitals can generate an average of $450,000 more referral revenue from a UCC than from non-urgent-care-based PCPs.^{[30] footnote [30]}

• Virtual care. Forty-five percent of hospital executives say their telehealth use exceeds pre-pandemic levels.^{[31] footnote [31]} Physician groups continue to increase usage. On the retail side, Walmart announced expansion of its primary care telehealth services. All of this movement augurs well, as seen in the substantial compound growth rates forecasted across all virtual modalities (Figure 2).^{[32] footnote [32]}

  

  
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• Hospital-at-Home. Hospital-at-home (HaH) services are rapidly gaining traction and expected to grow at 119% compounded annually between 2022 and 2029.^{[33] footnote [33]} A recent CMS study found HaH equal or better to inpatient on most quality measures and able to generate $1,640 in lower average 30-day post-discharge Medicare spending.^{[34] footnote [34]} Continued federal support of the hospital waiver program is required to propel growth.

Emphasis on capturing value from growing investment in finance technology.

A survey of providers, insurers and employers found that 75% have increased spending on digital health solutions over the past two years.^{[35] footnote [35]} IT spending to support administrative functions has also been strong.

The task now is to scale those investments to capitalize on their benefits and achieve real returns. Leadership frustration with technology progress is mounting. For example, a 2024 analysis estimated over $8 billion annually in cost increases from IT technologies that engender inefficiencies, delayed care, data breaches and other issues.^{[36] footnote [36]} Leaders in another study said they are only “midway” on the path to improved patient care through digital technologies, with notable underperformance at non-acute care sites.^{[37] footnote [37]} Proliferation of solutions is a key impediment. Over half of surveyed organizations are using at least 50 software solutions to manage healthcare operations, suggesting ongoing fragmented IT environments.^{[38] footnote [38]}

Investments are showing great promise in healthcare finance. Three technologies will stand out in 2025 for their ability to offer robust near- and long-term payoffs.

Process automation

The right automation tools in areas such as payables and receivables represent low-hanging fruit for organizations. They free staff from myriad repetitive tasks to concentrate on higher-level work. Automation also enhances capture of consistent quality data and streamlines payments infrastructure.

The opportunity is significant. The most recent CAQH Index estimated that fully electronic processing could shave one-fifth of current spending on high-volume administrative transactions, for a total industry savings of $16.4 billion.^{[39] footnote [39]} Many aspects of payments have room to automate further, with the share of fully electronic transactions standing at 88% for remittance advices, 73% for claims payments, 31% for prior authorizations, and 29% for attachments.^{[40] footnote [40]} Many payments are still transacted via paper check. Significant percentages of medical practices struggle with posting, tracking and financial reporting of patient payments.^{[41] footnote [41]}

Growth in remittance management systems, robotic process automation, and other finance technologies will be healthy in 2025. Most health system leaders (87%) report intensified demands for RCM system upgrades.^{[42] footnote [42]} RCM technology/services was the highest sector of health IT focus among surveyed investors (70%).^{[43] footnote [43]}

Artificial intelligence

A high-interest and fast-emerging phenomenon throughout healthcare, AI is being explored to improve finance and RCM. Multiple benefits are expected, led by automation and efficiency (Figure 3).^{[44] footnote [44]} A specific example is that generative AI could automate accounts receivable follow-ups and “structure fact-based appeals to health insurers incorporating historical insurer performance, policy manuals, and contracted terms.”^{[45] footnote [45]}

Figure 3
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Given the potential uses, it is unsurprising that 71% of surveyed venture/private equity firms indicate they are prioritizing 2025 AI investments in healthcare finance/RCM.^{[46] footnote [46]} The ambulatory sector is participating as well. New or expanded AI use was cited by 43% of medical groups in 2024, up from 21%. In 2025, 45% of medical groups plan deployment, including RCM platforms.^{[47] footnote [47]}

Accurate AI output is a concern. One health system executive notes that today’s solutions work well on basic functions, but not the “middle revenue cycle tasks that require more detail and clinical knowledge.”^{[48] footnote [48]} Another emphasizes that AI needs to “learn the complex algorithms involved in revenue cycle and finance operations.”^{[49] footnote [49]}

AI will offer different approaches, ranging from “copilots” that support workers to fully autonomous agents that can replace human work. Another consideration is that generative AI “will be more likely to erode a competitive advantage than to confer one, because its very nature makes new insights and data patterns almost immediately transparent.”^{[50] footnote [50]}

Digital payments

Digital payment rails continue to grow. CommerceHealthcare^® actively monitors this field and offers a current update.

• ACH. Healthcare transactions totaled 132 million in the third quarter of 2024, a gain of 7.8% over the same period in 2023.^{[51] footnote [51]}
• Real-time/instant payments (RTP). RTP rails offer speed-to-cash, risk reduction and user convenience. One window into current uptake was provided by a survey of small and medium-sized healthcare organizations and businesses, which found that in the last year, 83% either sent or received real-time payments, and 57% used them bidirectionally.^{[52] footnote [52]} Seventy percent of healthcare organizations plan to adopt instant payments in the next two years.^{[53] footnote [53]} Studies also show that both consumers and businesses place a high premium on fast receipt of funds and would pay transaction fees for RTP.^{[54] footnote [54]}
• Real-time treasury services. Digital technology also enables a host of real-time treasury solutions, including instant supplier payments, just-in-time payments and cash sweeping.^{[55] footnote [55]}
• Digital wallets. Digital wallets are essentially a substitute for credit cards. Global growth is pegged at 73% between 2024 and 2029.^{[56] footnote [56]} U.S. consumers are adopting rapidly, with 48% indicating that they have used a digital wallet in the past 90 days, up 12 percentage points from 2023.^{[57] footnote [57]} Expanded use in healthcare is predicted.
• AI-influenced payments. AI adds sophisticated intelligence to payment routing, reconciliation and analytics.^{[58] footnote [58]}

Automation, AI, digital payments — these and other finance technologies are reaching a point of urgency for many. A health system CIO asserts that “the velocity of technical disruption is the biggest threat in health IT and RCM,” while an RCM executive warns that new technologies are “rapidly accelerating the gap between high and low performing organizations.”^{[59] footnote [59]}

Patient financial assistance expanding to maintain revenue streams and improve access to care.

CommerceHealthcare^® research has consistently described the strategic benefits organizations obtain through comprehensive financial assistance to patients. Expanded help will assume even greater value throughout 2025 as the need grows and the implications of patient financial struggles multiply.

The affordability crisis

Many Americans continue to face significant affordability problems that are exacerbated by healthcare cost inflation and greater self-pay obligations. The magnitude of the issue is revealed by current data.

Health insurance costs are escalating. The average individual employee is spending over $1,100 annually out-of-pocket.^{[60] footnote [60]} Additional statistics include:^{[61] footnote [61]}

• $6,296 is the average for a 2024 family employee premium.
• 59% of employees have coinsurance for hospital admissions (average 21% rate), 16% have copayment obligations (average $343), and 9% have both.
• 32% of covered workers carry an annual individual deductible of $2,000 or more, though some reduce the obligation through a health savings account.

Older adults feel particularly vulnerable. On average, a Medicare-covered individual annually spends more than $6,600 out of pocket for health services, medications and supplemental insurance, and those in poor health spend an average of 20% of their income on healthcare.^{[62] footnote [62]} Even midlife adults are strained. Those who are privately insured pay higher premiums and out-of-pocket expenses relative to adults of other ages.^{[63] footnote [63]}

Uncertainties about insurance coverage create additional trepidation (Figure 4).^{[63] footnote [63]}

Figure 4
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Half of all patients carry debt ranging from $1,000 to $5,000, and one in four owes more than $5,000.^{[65] footnote [65]},^{[66] footnote [66]} Over 15% of families have past-due medical debt, with 61% of the balances over $1,000.^{[67] footnote [67]}

Organizational implications: financial and access

The ramifications of patient affordability problems for provider financial and health access goals are significant.

• Revenue. Along with patient health risks, deferred or avoided care due to affordability limits provider revenue. A national poll estimated that over 72 million people elected not to pursue necessary treatment in the past three months because of cost.^{[68] footnote [68]} Another study found that 38% of respondents delayed or skipped care over the previous year, with consistency across insurance types (Figure 5).^{[69] footnote [69]}

  

  
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• Cash flow. Providers generally collect less than full patient obligation. The rate drops precipitously as the debt amount increases (Figure 6).^{[70] footnote [70]} Total 2023 provider bad debt write-offs totaled $17.4 billion.^{[71] footnote [71]}

  

  
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• Equitable access. Providing quality care regardless of socioeconomic status is a leading priority today. Lower income has been shown to correlate to worse health on several levels (Figure 7). Greater percentages of lower-income individuals drop insurance coverage.^{[72] footnote [72]} Patient financial help also frequently exhibits disparities. Hospitals extend partial repayment plans to past-due accounts for 44% of patients over 250% of the federal poverty level, compared with about 25% of those under 100%.^{[73] footnote [73]}

  

  
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Patient financing imperative

Pressure continues to be exerted on providers to expand financing programs. Payment plans with longer durations and larger dollar amounts need to be available. Offering such flexibility necessitates that many organizations turn to external financial institutions to help scale programs.

Zero interest rate lines of credit are proven mechanisms. They accommodate subsequent additional care charges without new loan origination. Another helpful option is financing based on pre-service cost estimates. Only 45% of surveyed hospitals with financing programs for insured patients provide a pre-service path.^{[74] footnote [74]}

Better patient financial experience an ongoing mission.

Robust patient financial assistance programs foster another vital goal: improving the end-to-end patient experience. The link is direct. Thirty percent of consumers say affordability is “most important to their healthcare experience.”^{[75] footnote [75]} Older adults with low financial resources are “less satisfied with the health care system, giving lower grades to providers.”^{[76] footnote [76]}

Room for improvement

Unfortunately, many organizations still fall short of their financial experience goals. Almost two-thirds of patients in a study described their payment experience as equal to that in 2022 — “which has historically meant unsatisfactory” notes the authors — while 23% said it has worsened.^{[77] footnote [77]} A “blind shopper” inquiry of hospitals uncovered numerous instances in which “siloed offices handle financial assistance, billing, and upfront payment requirements,” frustrating the task of obtaining complete information.^{[78] footnote [78]}

Effective strategies

Multiple avenues to enhanced patient financial experience are showing positive results:

• Greater price transparency. Advance information on cost of care is highly valued. Just under one-third of patients indicated receiving a pre-service estimate.^{[79] footnote [79]}
• Technology. Process automation as described earlier removes friction throughout the payments process and enhances patient choice, as do digital payments. Mobile technology is another linchpin. Fifty percent of patients prefer to engage with their healthcare providers via a mobile platform.^{[80] footnote [80]} That is why 67% of organizations have a dedicated mobile platform for convenient digital engagement, and 52% will invest in mobile engagement apps and platforms over the next 12 months.^{[81] footnote [81]} AI agents capable of “human-like conversations” with patients will develop to provide “supporting guidance prior to preadmission appointments at hospitals.”^{[82] footnote [82]}
• Holistic perspective. Many urge a broader focus on “healthcare experience” that encompasses attention to staff, family and other participants in the financial experience.^{[83] footnote [83]}

Cybersecurity a major overhang.

Cybersecurity deserves special attention in the technology landscape. Security risks are substantial and will continue to consume leadership attention throughout 2025.

Staying secure is an uphill battle

Healthcare cyberattacks are frequent, diversified and effective. A few current statistics corroborate this potent brew:

• In 2024’s third quarter, healthcare averaged 2,434 attacks per week, up 81% over last year’s same period.^{[84] footnote [84]}
• 67% of healthcare organizations experienced ransomware incidents through August 2024. Over one-third of the demands exceeded $5 million.^{[85] footnote [85]}
• Healthcare has the costliest data breaches among all industries, with the average incident now standing at $9.77 million.^{[86] footnote [86]}
• The ambulatory sector isn’t immune. A survey of medical groups highlighted that 72% have increased cybersecurity expenditures.^{[87] footnote [87]}

Newer or growing areas of vulnerability include:

• Medical devices. Devices are now being targeted as a major opportunity to disrupt clinical operations.
• Payments fraud. Online payments fraud is estimated to generate worldwide losses of $362 billion between 2023 and 2028.^{[88] footnote [88]} Check fraud is also on the rise. In a multi-industry study, 65% of respondents reported that checks are the most susceptible method for fraud.^{[89] footnote [89]} That is a red flag for check-heavy healthcare.
• Misinformation and “malinformation.” The latter manipulates facts to mislead. As if data breaches and ransomware aren’t enough, healthcare is engaged in counteracting efforts to undermine consumer knowledge. Gartner predicts that “by 2028, enterprise spend on battling malinformation will surpass $500 billion, cannibalizing 50% of marketing and cybersecurity budgets.”^{[90] footnote [90]} A research team recently used machine learning technology to build a model that outputs “poisoned” medical knowledge. Such capability heightens fears about intentional destruction of consumer trust in medical knowledge discovery.^{[91] footnote [91]}

Significant defense gaps

Some leaders perceive deficiencies in their organizational cybersecurity. A poll of security executives showed a split situation, with 47% rating themselves advanced or proactive and an equal percentage unprepared or reactive (Figure 8).^{[92] footnote [92]} Only 31% of surveyed healthcare and life sciences organizations feel “very prepared” to meet future compliance and risk challenges. Fifty-three percent lack the financial resources needed to keep up with security threats.^{[93] footnote [93]}

Figure 8
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Key response themes

Healthcare organizations are hardly standing still in the face of the security onslaught. One ascendant strategy is fortifying resilience through vendor backup. The major Change Healthcare security breach exposed the reliance at most organizations on a single services supplier. This risk will be mitigated as 2025 unfolds through the addition of RCM vendors for redundancy. Contracts will likely be amended to permit healthcare systems to unwind quickly from a partner in the event of a security-based performance problem. For their part, RCM companies may introduce lower-priced services to secure “backup partner” contracts.

At the same time, security leaders want to consolidate technology tools. Frustration is mounting over the proliferation of security technologies that often don’t work together and create defense gaps. Today’s mantra is optimizing performance and integration of existing tools rather than chasing new solutions.

AI’s role is expanding as well. It will help substitute for a shortage of skilled cybersecurity personnel. It can learn employees’ specific work patterns and alert them to threats in real time.^{[94] footnote [94]} Generative AI will shore up defenses by learning from a wider range of signals such as video.

M&A and creative partnerships further industry consolidation.

The M&A outlook for 2025 and beyond is fairly robust. Most healthcare systems anticipate maintaining or increasing current levels over the next three years, driven by multiple financial objectives (Figure 9).^{[95] footnote [95]} Powerful patient care motivations include improving access and rapidly adding service lines.

Figure 9
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Academic medical centers have emerged as particularly active buyers. They’ve targeted struggling rural and community hospitals that offer a channel for the academic center to alleviate its overcrowding issues and expand patient access.^{[96] footnote [96]}

Several current challenges complicate the M&A landscape:

• Transaction changes. Lower valuations and longer due diligence have characterized the recent environment.^{[97] footnote [97]}
• Questioning of cost impact. The results of completed acquisitions show that 34% produced decreased inpatient care costs and 30% lower outpatient.^{[98] footnote [98]} Those rather anemic figures suggest to some observers that consolidation isn’t eliciting cost reduction commensurate with value-oriented reimbursement requirements.^{[99] footnote [99]}
• Heightened regulatory scrutiny. Moody’s warns that states are expanding merger reviews, which could be problematic both for “distressed systems seeking exit strategies” and for acquisition-minded healthcare systems that would “need to reassess their growth strategies.”^{[100] footnote [100]} Federal oversight may lessen with the new administration, and historically the risk of review has been low. Only 13 of over 1,000 hospital mergers between 2000 and 2020 were challenged by the FTC.^{[101] footnote [101]}
• Competition from private equity. The expectation is that private buyers will continue to compete with healthcare systems for acquisitions. Recent estimates place the total uncommitted capital of private equity and venture firms at “a record $2.62 trillion.”^{[102] footnote [102]}

The partnering alternative

Meaningful alliances between healthcare systems and other entities represent a viable alternative to M&A in many instances. Innovative partnerships are proliferating. For example, Cleveland Clinic and Amazon One Medical are bringing their complementary strengths to a venture providing coordinated primary and specialty care in Ohio. UF Health has partnered with a private equity-backed firm to open three facilities that combine an emergency room and an urgent care center.^{[103] footnote [103]} Other hospitals are pursuing similar models.

The promise of these alliances is growth at a lower investment and risk than “going it alone.” It behooves organizations to determine the competitive advantages that will make them attractive partners.

Growing impetus for new care and business models.

Many stakeholders see bolder moves to replace legacy care delivery and business models with truly transformative ones as essential to meeting the demands of 21st-century healthcare. Four core elements are believed to be fundamental to the new model.

Value-based

There is a long history of CMS initiatives promoting value-based care (VBC) to replace the fee-for-service paradigm (Figure 10).^{[104] footnote [104]} Success has proved elusive. Nearly all hospitals have implemented at least one value-based care program, covering 49% of their patient populations, yet just 17% of providers derive more than 20% of net patient revenue from the various VBC payment modes.^{[105] footnote [105]} Only 29% of leaders claim substantial cost savings from VBC programs.^{[106] footnote [106]} With a fresh wave of mandatory bundled payments in place, both healthcare organizations and government sponsors will need to make significant changes to garner success.

Figure 10
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Need-based

Consumers seek medical help depending on how they feel. That “demand-based” approach can be inefficient and costly. A need-based approach would proactively “leverage a suite of technologies to predict, identify, and communicate specific data to clinicians to decide how and when to intervene.”^{[107] footnote [107]}

Tightly integrated

An integrated end-to-end care experience is highly desirable. Technology is one key enabler. For example, today’s so-called digital front doors are evolving to “digital corridors” that orchestrate “all aspects of the healthcare ecosystem, providing consistent care across devices and platforms and seamless interactions and handoffs.”^{[108] footnote [108]} Almost 9 in 10 technology investors surveyed agree that ”apps that don’t integrate well with broader healthcare ecosystems … are falling out of favor.”^{[109] footnote [109]}

Personalized

New therapies and diagnostic technologies are leading the way to “bespoke care.” Clinical data will be gathered and analyzed to “personalize treatment recommendations” with great precision.^{[110] footnote [110]} This path substantially alters the care relationship and represents the ultimate patient-centricity.

Innovative, integrated, streamlined financial transactions will be essential supports for next-generation healthcare. New financial platforms bolster the case for adopting significant automation, AI and digital payments throughout the revenue cycle and payments processes.

New business models are also altering the finance function. The new year will see further development of the CFO role. Burgeoning responsibilities are creating the “exponential CFO,” whose mission is to “lead the organization through unprecedented changes both in scale and speed by accelerating value creation across the organization, driving enterprise-wide operational excellence, and shaping talent experience and culture (Figure 11).”^{[111] footnote [111]}

Figure 11
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Conclusion.

The roadmap is clear though challenging to follow. It involves harnessing the eight trends in this report to put the organization on a sustainable financial footing, help patients with their growing payment obligations, and make effective enterprise-wide use of technology. Simultaneously, new core administrative and clinical models must be nurtured. The through line is change. Leaders agree that they need to embrace change, step up its pace, experiment, learn and scale solutions. They will need allies for this ambitious agenda, and CommerceHealthcare^® is committed to helping providers navigate it successfully.

CommerceHealthcare^® solutions are provided by Commerce Bank.

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