Increasing costs, declining health: 8 healthcare trends defining the industry

Healthcare spending in the United States is projected to reach a staggering $7.7 trillion by 2032, a 72.6% increase from 2022, according to the 2024 Trends Shaping the Healthcare Economy Report from Trilliant Health. Despite spending almost twice as much on healthcare than any other country in the world, the U.S. is seeing a decline in overall population health and stagnant healthcare utilization.  

In other words, the U.S. healthcare system fails to provide value to all stakeholders. The concept of value takes center stage in this year’s healthcare trends report, and highlights a critical shift in how the industry must approach care delivery and cost management.  

8 trends defining healthcare in the U.S.

1. Unhealthier by the day: The percentage of U.S. adults with chronic conditions is expected to rise by 12.4 percentage points between 2020 and 2050. Obesity rates continue to climb, with 36% of adults classified as obese in 2022. The number of adults in the U.S. with a diabetes diagnosis is also steadily climbing.
2. Higher spending, poorer outcomes: Despite outspending peer countries, U.S. healthcare utilization has remained largely unchanged since 2000. The report measured healthcare utilization by the number of doctor’s appointments per capita. The U.S. had an average of 3.9 clinicians consultations per capita compared to 7.6 in other OECD countries. One reason for this may be that the U.S. has only .31 primary care physicians per capita – compared to .81 in the U.K. and 1.83 in the Netherlands. Life expectancy in the U.S. is almost four years lower than in comparable OECD countries. Lower utilization suggests that health status in the U.S. will only get worse as preventative care and interventions are missed.
3. Regulation aims high but falls flat: Federal efforts to enhance healthcare quality and reduce costs have fallen short of their goals. Value-based payment models, intended to align provider incentives with patient outcomes, only account for about a quarter of all healthcare payments in the U.S. In addition, programs designed to generate savings are projected to increase Medicare expenditures by $9.4B by 2026.The burden of quality reporting continues to weigh heavily on healthcare providers. While there’s been a slight reduction in the number of quality measures tracked, a significant portion of providers still struggle to report these metrics effectively. Tracking and reporting quality measures is an expensive endeavor and some medical centers spend millions on compliance. This diversion of resources from patient care to administrative tasks raises questions about the effectiveness of current government approaches to healthcare reform, especially given the lack of clear evidence showing improvements in health outcomes as a result of these initiatives.
4. Uncertain technological value: While new technologies like AI and gene therapies show promise, their impact on overall healthcare value remains unclear.The report points out that despite significant investments in electronic health records (EHR), only about 70% of hospitals fully utilize these systems. In other words, hospitals struggle to integrate all the data that EHRs have. Moreover, the adoption of AI in clinical settings has been slow, with only a handful of AI-specific billing codes seeing significant use, primarily in cardiology. Patient trust in AI for healthcare decisions also remains low, with less than 40% of U.S. adults feeling comfortable with AI-assisted diagnoses or treatment recommendations
5. Physicians shortage persists, and those who remain are not evenly distributed: By 2036, the projected shortage of primary care physicians could exceed 40,000, with similar gaps in other specialties and significant deficits projected in surgical fields. The distribution of healthcare providers is also uneven across regions, leading to disparities in access to care.The workforce landscape is shifting, with more physicians opting for employment by corporate entities rather than independent practices. This trend could impact care delivery models and patient-provider relationships. Additionally, the nursing profession has seen fluctuations in its workforce, with some age groups experiencing declines followed by rebounds in recent years.
6. Health consumerism has led to fragmented care: As healthcare costs continue to rise, patients are increasingly bearing the financial burden. High-deductible health plans have become more prevalent, with average deductibles for these plans increasing by over 50% since 2007. This shift has led to a situation where nearly half of Americans struggle to afford healthcare, with many allocating a significant portion of their monthly budget to health-related expenses.The push towards consumerism in healthcare has also led to fragmentation in care delivery. While intended to empower patients, this trend has often resulted in disjointed care experiences without corresponding improvements in value or outcomes. 
7. Lower-cost settings can provide more value: There’s a noticeable shift in care delivery from traditional hospital settings to lower-cost alternatives. Ambulatory surgery centers (ASCs) are capturing an increasing share of surgical procedures, with the proportion of ASC-eligible surgeries performed in these settings rising significantly in recent years.Urgent care centers have also seen growth, with volumes increasing substantially since 2019. This trend reflects changing consumer preferences for more convenient, accessible care options over anything else, like provider-patient relationships. The impact of these shifts on overall healthcare quality and long-term patient outcomes is still being evaluated.
8. Employer demand for value: Employers, who provide health insurance for a large portion of Americans, are becoming more proactive in demanding better value for their healthcare spending. With access to new price transparency data, they are better equipped to negotiate with healthcare providers and insurers.The report highlights significant variations in negotiated rates for common procedures across different markets, sometimes differing by tens of thousands of dollars. Interestingly, these price differences often don’t correlate with quality measures, suggesting opportunities for employers to seek out high-value care options for their employees. 

While technological advancements and shifts to lower-cost settings offer some promise, the overall trend of increasing costs without corresponding improvements in health outcomes is unsustainable. As employers and patients become more empowered to demand value for their healthcare dollars, providers and payers will need to adapt to survive in this changing landscape. 

The challenge for the U.S. healthcare system in the coming years will be to align incentives, leverage technology effectively, and focus on preventive care to improve health outcomes while controlling costs. Potential solutions may include strengthening primary care, improving care coordination, addressing social determinants of health, and reimagining payment models to truly incentivize value.  

“Every knowledgeable stakeholder must acknowledge that the inputs of the U.S. healthcare system, as measured by cost, exceed the outputs, as measured by the actual value or benefits received by Americans,” said Sanjula Jain, Ph.D, and Health Chief Research Officer at Trilliant Health in the press release. “Every stakeholder can – and must – deliver more value for money to their customers.”