Health care leaders course correcting as a result of market, policy climate

As macroeconomic and policy shifts continue to rattle industries across the country, healthcare decision-makers are recognizing the need for strategic change to keep up. 

Economic and regulatory policies are particularly affecting leaders in health industries in comparison to executives in other sectors, according to a PwC's May Pulse Survey, highlighting the pressures facing healthcare organizations everywhere. 

Whether it's providers trying to manage rising labor costs, pharma and medtech working to overcome supply chain challenges, or payers dealing with drug pricing, health care has been significantly impacted by the ebbs and flows taking place in Washington. 

While nearly half (48%) of the 678 executives across six industries surveyed by PwC cited U.S. economic policy as a top-three reason to rethink their short-term strategies, that was the case for 61% of healthcare leaders. 

Healthcare executives also gave more weight to other factors driving short-term strategy shifts in comparison to other industries, including AI and data regulations (56% to 44%), U.S. trade policy (44% to 41%), U.S. federal government spending and budget policy (37% to 35%), and corporate tax policy (34% to 33%). 

The factors that resonated less with healthcare leaders than other sectors were U.S. antitrust and competition environment (24% to 31%) and climate policy (22% to 31%), with U.S. immigration policy's impact seen as even (22% for both). 

In terms of most pressing concerns, health industries executives called attention to cyberattacks (90%), the uncertain macroeconomic environment (90%), margin pressure affecting earnings (85%), the complex regulatory environment (80%), and access to skilled labor (80%). 

Health care flagged cyberattacks as a moderate or serious risk more than any other industry, reflecting how vulnerable healthcare organizations have been to recent cyber incidents that have slowed operations and led to revenue loss. 

Unsurprisingly, access to skilled labor is keeping healthcare leaders up at night as workforce challenges continue to plague the industry. 

"Providers face shortages as they care for an aging population with increasingly complex needs," PwC analysts wrote. "Pharma requires specialized expertise in biomanufacturing, cell therapies and regulatory compliance. While technology can improve the productivity of existing staff, mitigating some of the labor crunch, it comes with its own set of commitments like investing in change management and training. The AI wave is also driving increased demand for talent proficient in AI, machine learning and data analytics." 

Healthcare executives have little choice but to adjust to combat the economic and policy volatility, which includes revising financial forecasts and budgets, implementing cost reductions, assessing tariff impacts, renegotiating supplier prices, and even reshoring manufacturing operations, according to the survey. 

"To steer business through all this uncertainty, HI leaders have to stay nimble," PwC analysts wrote. "This means focusing on customers, making processes more efficient, significantly lowering cost structures and doubling down on the fundamentals of quality, compliance and cyber protection." 

Source: Health Leaders Media