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What to Expect in Healthcare in 2025

by | Jan 6, 2025 | Healthcare

Reading Time: 8 minutes

2025 will be a pivotal year for healthcare organizations as they look to regain financial footing, manage new uncertainties, and respond to societal and technological change. Hopefully, healthcare organizations will rise to meet the challenges they face and make improvements on both the health of their organizations and the patients they serve.

What are the topics that will dominate the healthcare space in 2025? Let’s examine some of the most pressing issues.

1. Financial pressures

The pandemic may be over, but the financial impact of it is not. Over the last several years, hospitals have struggled with both increased costs and decreased reimbursement.

In May 2024, the American Hospital Association released its Costs of Caring report. The data revealed some hard truths around the state of finances at hospitals. Among the findings:

  • Labor accounts for 60% of a hospital’s budget. Those costs increased by more than $42.5 billion between 2021 and 2023.
  • During the same period, inflation grew by 12.4%, while Medicare reimbursement grew only 5.2%.
  • Underpayment is a big problem for many healthcare services; for example, inpatient behavioral health payments average 34% below costs and burn and wound services payments average 43% below costs.
  • Prior authorization and denials are adding to the administrative burden at hospitals.

So what should we expect in 2025?

  • According to Moody’s Investor Services, many healthcare organizations will experience stronger revenue growth in 2025. However, they will still be challenged by higher labor costs as they try to retain employees.
  • The impact of inflation is uncertain at this point. Economists have recently raised their inflation projections for this year based on tariff concerns.
  • Following the murder of UnitedHealthcare CEO Brian Thompson and the backlash against insurance companies, expect more focus on issues such as prior authorization and denials. There will be lots of discussion on improving patient care and reducing the financial burden on patients, as well as ways to improve the claims process between insurers and providers.

 

2. Uncertainty over new administration

Many in healthcare are waiting with baited breath to see the impact that the new Trump administration will have on the industry. Trump’s pick for Secretary of the Department of Health and Human Services, Robert F. Kennedy, Jr., has many in healthcare on edge for his previously stated beliefs on topics such as vaccines and fluoride in water.

In addition, Trump himself hasn’t laid out a formal healthcare agenda. Despite this, we can look to 2016 and to Trump’s traditional policy stances to get a good idea as to what his priorities will be over the next four years.

Here’s what we can likely expect in 2025:

  • Affordable Care Act: According to PwC, efforts to overturn the Affordable Care Act (ACA) don’t have the same support that they had in 2016. This means we’re more likely to see changes to the existing act rather than more sweeping reforms.
  • Pharmaceutical prices: While Republicans are generally fans of less regulation, Trump and V.P.-elect J.D. Vance have been proponents of reducing drug prices. Recently, Trump said, “We’re going to knock out the middleman” and get rid of pharmacy benefit managers (PBMs), who he says are responsible for the high cost of drugs.
  • Focus on chronic diseases: If RFK, Jr. is confirmed as HHS Secretary, expect a focus on reducing the impact of chronic diseases. Kennedy is a proponent of healthier diets to reduce obesity, and it’s believed he will try to focus on improving food quality. What’s less clear is whether Kennedy will seek to improve access to weight loss drugs such as Ozempic or Wegovy, as he believes “the first line of response should be lifestyle” in combating obesity.

 

3. Focus on cybersecurity

Sophisticated ransomware attacks, data breaches, and infiltration attempts targeting sensitive patient data and critical medical equipment are on the rise. We saw this in 2024 with the Change Healthcare data breach, affecting approximately one-third of the American public. The consequences of a data breach can be dire—leading not only to significant financial losses and reputational harm, but also potentially compromising patient safety and the delivery of quality care.

Moreover, as healthcare continues to expand beyond the hospital walls, the cybersecurity perimeter grows more diffuse. More patients will be using at-home monitoring devices, accessing their medical records online, and communicating with providers through telehealth portals.

So what can we expect on the cybersecurity front in 2025?

  • Advanced authentication and access controls: Hospitals are expected to move beyond traditional username-and-password combinations toward more robust authentication methods. This can include multi-factor authentication (MFA), biometric logins, and role-based access controls so that only authorized personnel can view and modify sensitive patient data.
  • Zero-trust architectures: Instead of assuming that entities inside a network are inherently trustworthy, hospitals will embrace zero-trust models. Every user, device, and system request will be verified continuously. Hospitals will invest in network segmentation and micro-segmentation—essentially breaking down the network into smaller “zones” so that a breach in one segment does not allow a threat actor to traverse the entire system.
  • Regular risk assessments and penetration testing: Hospitals will employ dedicated cybersecurity teams or third-party experts to perform routine vulnerability scans, penetration tests, and simulated phishing attacks. Results from these exercises will feed into remediation plans, and progress against vulnerabilities will be closely tracked and reported to executive leadership and boards.

 

4. Artificial intelligence

The last several years have seen a lot of discussion on the potential of artificial intelligence in healthcare. And in 2024, we started to see more tangible use cases of AI emerge, such as AI listening scribes.

Trust in AI continues to be one of the biggest barriers in implementation, so look for efforts to improve trust and transparency in the coming year.

Here’s what we can expect in 2025:

  • AI integration: There will likely be a lot of efforts in the coming year to integrate AI into existing applications as opposed to delivering AI-specific products. New partnerships will likely emerge in this area to serve as a force multiplier for AI.
  • Deeper integration into clinical workflows: As part of this integration of AI into existing applications, expect that AI will become an “invisible partner” in routine healthcare workflows. For example, AI-powered imaging tools will advance to real-time interpretation and even suggest follow-up imaging protocols. The technology will also spread to other fields in medicine to provide diagnoses, streamline patient triage, and recommend next diagnostic steps.
  • Greater transparency: In a recent survey published in JAMA, people were asked about their attitudes toward notification of AI use. Researchers asked participants how true it was that, “It is important that I am notified about the use of AI in my health care.” The survey found that only 8% of adults said that notification was not important. More than half (62.7%) said it was “very true” that they would want to be notified. In order to establish greater trust in AI, expect that notification that AI is being used will become more commonplace.

 

5. Expansion of sites of care

During the pandemic, there was a big shift away from traditional points of care as people increasingly chose options such as telehealth and urgent care clinics for their healthcare needs. These options are usually more convenient as they offer expanded hours, such as evenings and weekends, and often come with less hassle than visiting one’s primary care provider.

In 2025, expect to see shifts in this area as organizations aim to provide better patient service:

  • Health system investment: According to Deloitte, 64% of consumers consider virtual visits more convenient than in-person visits. Because of this, health systems will likely expand investment in alternative sites of care to keep patients in-network instead of heading out to other companies.
  • Connecting digital tools: The Deloitte survey also indicated that 43% of consumers are using connected monitoring devices and digital healthcare tools, such as the Oura Ring, Fitbit, or Garmin devices. In 2025, we can anticipate that healthcare systems will look for more ways to integrate and analyze the data from these devices in various settings, such as hospital at home.
  • Retail healthcare shakeout: 2024 saw some changes in retail healthcare as Walmart Health shuttered all its health clinics and telehealth operations. More recently, it was revealed that Walgreens is in talks to go private and sell itself to Sycamore Partners. Even CVS Health has had a shakeup in its management team due to poor financial performance. What does all this mean? In 2025, we can expect to see continued volatility in this sector as companies figure out what business models are viable.

 

Conclusion

2025 will certainly be a busy year in the healthcare sector as hospitals seek to try and improve profitability, but also navigate some uncertain times as a new administration is sworn in. Technology provides both opportunity and challenges – hopefully this year, hospitals will rise to the occasion and figure out the best path forward towards improving both financial and patient health.

 

Kathy Sucich
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