Markets in Focus :: Healthcare Q2 2024

The healthcare sector emerged from the pandemic transformed and on a path that will not be reversed: healthcare delivery changes affected almost all aspects of the industry. Technology innovation with greater reliance on artificial intelligence and a shifting environment of care, such as more outpatient services, home health and telehealth. Healthcare staffing and provider burnout are also continuing concerns.

State regulations are also dictating changes in healthcare delivery. While major, transformational initiatives like “Medicare for All” or other single payer models are unlikely to be adopted given current congressional stalemates, regulatory initiatives at the margins, will continue to drive change. For example, 2023 revisions to Medicare Advantage program coverage requirements will expand mandatory care in certain scenarios, creating a closer alignment between these plans and traditional Medicare plans.¹

Medicaid coverage, representing $1 out of every $6 spent on healthcare in the U.S., is an exception to the general extension of pandemic-era policies and trends.² Medicaid enrollment is expected to decline in 2024 as the continuous enrollment requirement adopted during the pandemic unwinds. Narrow expansions of coverage by some states will not be enough to offset this.³ This will likely increase demand for uncompensated care at public hospitals and clinics.

Finally, given that adverse health conditions are correlated with declining personal economic status,⁴ if the economic recovery does not reach persons at all levels of income, the effects of the diminishing safety net within Medicaid will be more pronounced.

Learn more in the latest Healthcare Markets in Focus.

Resources and References

1. American Hospital Association. (2023, April 7). Special Bulletin: CMS Finalizes CY 24 Medicare Advantage Rule. American Hospital Association. https://www.aha.org/special-bulletin/2023-04-07-cms-finalizes-cy-2024-medicare-advantagerule
2. Williams, E., Hinton, E., Rudowitz, R., & Mudumala, A. (2023, November 14). Medicaid Enrollment and Spending Growth Amid the Unwinding of the Continuous Enrollment Provision: FY 2023 & 2024. Kaiser Family Foundation. https://www.kff.org/medicaid/issue-brief/medicaid-enrollment-and-spending-growth-amid-the-unwinding-of-the-continuous-enrollment-provision-fy-2023-2024/
3. Ibid
4. Venkataramani, A., O’Brien, R., Whitehorn, G., et al. (2020, September 12). Economic Influences on Population Health in the United States: Toward Policymaking Driven by Data and Evidence. NCBI. https://www.ncbi.nlm.nih. gov/pmc/articles/PMC7467305/

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