May 2022 | Report

Healthcare Executive Poll—Q2 2022

The future of healthcare is digital—and vertically integrated

Healthcare Executive Poll—Q2 2022

We’ve watched over the last two years as the pandemic accelerated the ongoing shift to personalized, value-based, and technology-driven healthcare—changes that helped push M&A and investment in the sector to record highs.  

Yet with the economic picture darkening, the first few months of 2022 have seen a dip in deal activity. Meanwhile, the labor shortage continues to hit healthcare and life sciences companies especially hard—burnout, increasing demand for workers, and wage pressures are intensifying.  

What does the future hold? In our Quarterly Executive Poll, industry executives weighed in specifically on two areas that will have a significant impact on organizations’ future success: vertically integrated payer-provider groups and the industry’s challenges in activating digital strategies.

The era of “payviders” has arrived  

As the industry transitions to value-based care models, alignments between payers, providers, and health tech companies around quality and cost savings offer natural advantages as organizations look to take on and manage risk. It’s no surprise, then, that when asked whether vertically integrated payer-provider groups are the future of healthcare, nearly 60% of H&LS respondents said yes. 

Heightened antitrust scrutiny may explain why some respondents thought otherwise: Last July, the Biden Administration instructed the Federal Trade Commission to review past and proposed mergers to address price increases and other potential impacts from consolidation.  

What’s stopping organizations from activating digital health strategies 

Technology is increasingly important, whether it’s being used to deliver more personalized customer experiences, improve organizations’ bottom lines, or drive virtual modes of care and better health outcomes. Emerging health-tech companies raised nearly $40 billion last year, more than double that of 2020.  

Our poll, however, shows the industry still faces several obstacles in activating such strategies. Challenges include attracting and retaining the talent needed to develop or support digital health (34%), lack of industry consensus on what “digital health” is and how it should work (32%), and lack of alignment between business and tech priorities (18%). 

In other words, taken together, an entire 84% of respondents indicated that the industry is facing fundamental misalignments when it comes to digital health. This dramatically underscores the need we see for redirecting some of the attention away from fancy technologies and focusing on conceptual and operational readiness to bring those technologies in the healthcare fold. Only in this way will those technologies make the impacts they’re designed to make—and make them continuously over time. 

Moving forward  

In an increasingly competitive landscape, healthcare organizations will need to become more and more digital, data-driven, analytical, and interconnected. It’s this digital thrust that connects West Monroe’s three key focus areas for the year to come:  

  • Costs – reining in operating costs and managing costs of care 
  • Consumers – redefining how healthcare companies interact with consumers  
  • Growth – renewing focus on growth and understanding the complexities – and opportunities – that come with consolidation and investment 
West Monroe’s Quarterly Executive Poll—Q2 2022
See what all industries said about inflation, the war on talent, and more—and learn about the poll respondents—in our main Quarterly Executive Poll.
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