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The health care and health insurance landscape are constantly evolving. So, you may be wondering, “What should I expect in 2025?” While we don’t have a crystal ball, we do expect several trends to continue in 2025.
Key Trends in Health Care for 2025
- Utilization of Artificial Intelligence: Use of AI is expanding into more and more industries every day. In health care, it’s being used to improve patient care, enhance diagnostic speed and accuracy, and boost operational efficiency. It can also aid with drug research and discovery. When it comes to treatment, it can analyze patient information to help caregivers develop more personalized treatment plans. It can deliver schedule reminders and health tips and provide information to help physicians better understand patient conditions. It can also streamline administrative tasks and reduce errors. AI-operated tools can be used in surgeries and operations. AI-based virtual nursing assistants can interact with patients and help deliver more productive, preventive, and personalized assistance to physicians. What it cannot be used to do, at least in California, is be the sole basis on which a health insurance claim is denied based on a new law effective this year.
- Increased use of wearables: The increasing use of wearable health care devices like fitness trackers, smartwatches, blood monitors, neurological sensors, and other specialized devices continuously monitor patients’ health. These tools enable earlier detection of potential issues or a need to make treatment adjustments. Wearables can track patients’ vital signs like heart rate, blood pressure, glucose level, and patient activity. They can provide physicians with greater insight into chronic disease management and engage patients to take a more active role in their health care and make more informed lifestyle choices.
- Workforce challenges: In spite of advances elsewhere related to health care, there are also challenges. These include talent shortages, the need for staff upskilling, and retention. The health care industry has high turnover due to competitiveness of compensation, burnout, demanding work schedules, a lack of work/life balance, and limited advancement opportunities. A Deloitte study found more than half (58%) of health system executives expect their organizations to face similar challenges in 2025, although the number is down 25% from two years ago. A partial solution may be achieved by nurturing greater trust with employees and redesigning work teams. Employers need to acknowledge their workers’ contributions, create new training programs and opportunities for growth and leadership, and invest more in retention and engagement.
- Continued consolidation: The last several years have seen ongoing integration of health care organizations and insurance companies. These mergers have been driven by economic pressures (rising costs and a need to reduce operating expenses), regulatory changes (which are likely to continue in response to the 2024 election), and consumer preferences. Consolidation can take many forms: horizontal mergers between entities offering similar services; vertical mergers where providers offering different services consolidate (like when a hospital or health plan acquires a physician practice or an urgent care center in the same market); and cross-market mergers with providers in different geographic market (like Kaiser Permanente’s acquisition of Geisinger Health or, on a grander scale, the Aetna and CVS Health merger in 2018. This trend dates back 30 years. According to KFF, formerly the Kaiser Family Foundation, there were 1,573 hospital mergers from 1998 to 2017, and another 428 hospital and health system mergers announced from 2018 to 2023. Community hospitals that are part of larger health systems also increased. Physicians working for a hospital or in a practice owned at least partially by a hospital or health system increased from 29% in 2012 to 41% in 2022. CVS, Amazon, UnitedHealth, and private equity firms are also acquiring physician practices, further shaking up the industry.
- Strategic partnerships: With so many individuals getting their health insurance through their jobs, employers play a pivotal role in employees living healthier lives. KFF says employer-sponsored health insurance is the largest source of coverage for non-elderly U.S. residents. More than sixty percent of those under 65, about 164.7 million people in 2023, had health insurance through their employer. Health plans, insurers, and employers can work together to develop and launch onsite workplace wellness and health screening programs, or contract with one another to offer health care services to employees and dependents. It is sort of reminiscent of how Kaiser Permanente got started in 1945 when industrialist Henry J. Kaiser and Sidney R. Garfield, MD, partnered to develop a pre-paid health care program that has grown to become one of the nation’s largest not-for-profit health plans serving 12.4 million members.
Looking Ahead: Navigating Health Care Industry Trends
The health care landscape is dynamic and continuously evolving. These trends demonstrate the industry’s commitment to innovation, technology, and improved patient care.
For another perspective on health insurance and health care trends, read the Capgemini Health Insurance Top Trends 2025. Come back to HeyHealthInsurance.com if you have questions about health insurance- or health care-related terms. We are adding new terms regularly.
