Healthcare consultants weigh in on top trends, challenges

Modern Healthcare’s Management Consulting Firms Survey annually asks companies about the state of the sector over the past year and what they foresee for the industry.

This year’s survey included 31 participants. Here are five takeaways:

1. Business performance consulting dominates.

Nearly 81% of responding firms are getting requests for help with operational improvements, while 68% of firms say their clients are seeking assistance with digital transformation, and 61% say clients need guidance on margin improvement.

By contrast, only 42% of responding firms said clients are seeking services regarding real estate and patient safety, and nearly a third said they were being tapped for telehealth needs.

2. Interest in home healthcare is strong.

Healthcare organizations are adopting new care delivery approaches and seeking guidance on their rollouts, including ongoing expansion of home care and related services.“Home health models enabled by virtual care, digital front door systems and remote patient monitoring are all gaining traction,” said Kendall Pelander, senior managing director at FTI Consulting.

Other firms also see strength in the sector.

“With advancements in remote patient monitoring technologies, home healthcare has become a viable option for more patients,” said David Reitzel, leader of healthcare consulting at Crowe. “This trend has accelerated as patients and providers alike have sought to minimize hospital visits.”  

3. Value-based care is expanding, but limitations remain.

Value-based care initiatives are gaining momentum, aiming to streamline patient care and support providers in delivering effective and high-quality outcomes, consultants say.

“Value-based care models continue to evolve, and both payers and providers face ongoing challenges to address reduced reimbursements and rising medical costs,” Pelander said. “Overall, we feel the market will continue to move forward with value-based care, particularly with the goals established by [the Centers for Medicare and Medicaid Services] to reach 100% VBC by 2030, which trickles down to all payers and providers,”

But some resistance remains.

“While most executives agree there is a strategic need for more value-based care arrangements, many feel that their organizations' operations are not set up for success in a value-based market, and investing in VBC capabilities has not been a high priority,” said Michael Wolford, principal at Forvis Mazars.

4. Cybersecurity efforts still have a long road ahead.

Consultants say risk assessment, threat detection and business resilience are the top areas in need of improvement when it comes to cybersecurity. Many are working with clients to improve readiness, but there’s still much to be learned.

Despite an increase in breaches, “downtime training and business continuity planning are often underestimated or neglected,” said Elizabeth Southerlan, partner at West Monroe. With a record number of breaches in the healthcare sector this year, it’s more critical than ever for organizations to understand threats and act accordingly. Resource availability is also a challenge.

“We understand that recognizing the importance of cyber risk management is one thing, but securing the necessary investment and authority for cybersecurity leaders to act is another,” said Nana Ahwoi, Partner, Americas Consumer and Health Cyber Industry Leader at Ernst and Young.

5. More market mergers are expected.

Consultants say they expect the healthcare market to consolidate further over the next year, as both the healthcare and economic landscapes shift.

“As merger and acquisition activity continues in the market, there will be a need to consolidate and standardize technologies and processes,” said Andy Smith, managing partner at Impact Advisors.

FTI’s Pelander noted the current market consolidation trend is likely continue as economic pressures on health systems intensify. 

To obtain the full Management Consulting Firms Survey results, click here.