What are finance leaders in healthcare thinking of most?

The U.S. healthcare sector is stepping out of the shadow of COVID-19 and into a brighter medium-term outlook and easing inflationary pressures. Despite ongoing labor shortages, cost pressures and digital implementation challenges, it’s on track for significant growth. McKinsey projects a 7% CAGR in total profit across the sector, reaching $819 billion by 2027.1

We surveyed 250 finance executives in U.S. healthcare to find out how their finance teams are aiming for growth. How are their priorities and perceptions of risk evolving? Are they doing anything differently from finance teams in other sectors? And how are they planning to keep up with healthcare technology trends such as artificial intelligence (AI) in healthcare?

Here’s what we learned:

1. There’s a shift to growth

Cost-cutting strategies in healthcare are still a top priority, but there are signs that healthcare industry finance leaders are gradually refocusing on growth.

  • 40% are targeting new investments, up from 33% in 2023.
  • 33% are evaluating new business models, up from 25% in 2023.

2. The greatest risk is talent

The top risk for survey respondents continues to be staff shortages and employee retention in healthcare, which this year rank much higher than other challenges such as cyber attacks and high inflation. In the healthcare sector, 44% of leaders say this is their top concern, compared with 40% in other sectors.

3. There’s a sharper focus on AI

Healthcare finance leaders are actively exploring healthcare technology, or healthtech, including AI. They’re interested in how AI can identify fraud, manage risk and automate processes, and 57% say they’re investing in AI – compared with 45% in 2023. In other sectors, just 50% are investing in the technology.

4. Despite high aspirations, there is slow progress on payments transformation

Healthcare finance leaders are increasingly prioritizing transparency and efficiency in payments. But the complexity of healthcare payment transactions has led the sector’s finance leaders to adopt new payment methods more slowly than finance leaders in other sectors. This slow uptake has also delayed their adoption of embedded payments:

  • 46% use instant payments, compared with 52% in other sectors.
  • 26% use application programming interfaces (APIs) to make and receive payments, compared with 31% in other sectors.

 

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  1. What to Expect in U.S. Healthcare in 2024 and Beyond, McKinsey & Company

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Disclosures

This discussion is intended to be informational only and is not exhaustive or conclusive. It is not intended to serve as a recommendation or solicitation for the purchase or sale of any particular product or service. It does not constitute advice and is issued without regard to any particular objective or the financial situation of any particular individual. Some of the information provided has been obtained from sources believed to be reliable, but is not guaranteed as to accuracy or completeness. Other information represents the opinion of U.S. Bank and is not intended to be a forecast of future events or a guarantee of future results. U.S. Bank and its representatives do not provide tax, accounting or legal advice. Each individual's financial situation is unique. You should consult your tax, accounting and/or legal advisor for advice and information concerning your particular situation.

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