At $3.35 trillion, the healthcare sector now accounts for 18% of the UK economy. This sector is expected to expand rapidly as baby boomers age and the demand for care rises. Healthcare bills and costs are projected to increase faster than inflation, according to experts. By 2026, the industry is expected to create 2.3 million new jobs. Controlling this growth in costs and employment will be challenging. As teams and facilities expand, there will be an increased need for competent healthcare administrators. Additionally, political shifts and technological developments present numerous challenges to healthcare executives.
Over 18 percent of the country’s gross domestic product, approximately $5 trillion, will be spent on healthcare by 2025. In general care, emergency assistance sectors provide essential services to the community, requiring a wide array of skills and knowledge. The healthcare sector faces several challenges, depending on its size and influence, including providing fair and high-quality service, securing and managing data, and supporting its workforce. Moreover, government agencies are seeking to exert more control over how these trillions are spent, while an increasing number of external disruptors compete for market share.
Challenges that healthcare leaders have to face
Healthcare organizations operate in an environment vulnerable to constant regulatory changes. They also face competitive pressure from new market entrants offering more convenient and lower-priced options. Medical practitioners must work to balance quality service delivery with the forces acting upon healthcare organizations and delivery systems. Healthcare organizations in 2025 face tremendous challenges that impact service delivery, technology integration, and operational systems.
1. Regulatory changes
The healthcare sector is strictly regulated due to the number of lives at stake. In recent years, the industry has emphasized regulatory changes since the pandemic. The goal is to help give healthcare organizations more freedom to deliver necessary care and allow patients access to their medical records more securely. Laws surrounding value-based care, health equity, fair pricing, and telehealth are also still developing.
This industry also has to follow new laws requiring some things, like the information blocking rule that requires companies to disclose patient records to patients, and new guidelines documenting the care associated with evaluation and management (E&M) visits. This fast pace of change is a major hurdle for the healthcare industry. Many changes affecting associate and staff employees now need to comply with new regulations that impact things they do regularly. Legal and compliance teams have to deal with overlapping laws and frequently alter policies regarding information sharing and care visits.
2. Patient experience
Patient satisfaction has declined due to slow clinical workflows and provider shortages. Even the patient experience is worsened by excessive wait times, on average 26 days between a scheduling contact and the appointment of a new patient, and inefficient manual tasks such as appointment scheduling, renewal of prescriptions, and discussions about test results. These problems raise the chances of patients leaving doctors, and this costs the health facilities money and harms their reputation. The 2025 target of the industry is to enhance the patient experience through the use of advanced technology and modern facilities. Real-time payments, digital check-in, reminders, and self-scheduling are among the features that should improve the levels of convenience and satisfaction.
3. Provider shortages
The healthcare sector faces a critical shortage of trained staff. Burnout, driven by the increased workload and rising administrative tasks, is a major factor. Consider that the available number of graduates of medical schools and residency programs is not sufficient to substitute almost 45 percent of doctors above 55 who are soon going to retire. Physician and nurse shortages especially affect rural areas in the United States.
4. Cybersecurity
Healthcare organizations process and store large lists of personally identifiable information (PII) and protected health information (PHI), and are an ideal target of a cyberattack. More than 180 ransomware attacks on medical institutions were detected in 2024; the average ransom was about 900,000 dollars. A victim of a cybersecurity breach not only loses money but others may suffer and, in severe cases, die as a result of such an incident. Ransomware attacks on hospitals affect approximately 80 percent of patients, and the related interruptions normally take two weeks.
5. Telehealth
Telehealth was quickly introduced into the healthcare sphere at the early stages of COVID-19, and its usage grew 78 times more in April 2020 than in February. Nonetheless, the future of telehealth is left in question as the country starts reopening to face-to-face care and the easing of the emergency state. Telehealth takes a minor fraction of the total medical claims today, and most of them are in mental and behavioral health, which implies the other specialties have not fully adopted it. There is an added complexity called vendor churn, since many of the contracts that the telehealth providers had signed specifically during the pandemic are being canceled. Organizations in the healthcare industry may undergo massive disruption where they re-evaluate telehealth technologies and partnerships.
6. Competition
Physical health systems are becoming increasingly competitive and disrupted. Retail clinics generated about $35 billion in 2024, with revenue expected to grow at an 8.6% compound annual growth rate from 2025 to 2030. These clinics are popular due to their extended hours compared to traditional doctors’ offices. Additionally, retail businesses without a history in care delivery are entering the market.
7. Invoicing and payment processing
The healthcare sector is vulnerable to income leakage, with 15 cents of every dollar earned going uncollected. Problematic revenue cycle management (RCM) is a significant problem. Paper-based procedures of insurance verification, prior authorization, follow-up on claims processes, and appeals on denial decisions are both inefficient and error-prone, resulting in the wastage of staff time and delayed repayments. Almost 70 percent of providers do not receive payment, even when it comes more than 30 days, and 75 percent of them use manual work.
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How can these problems be solved?
Although there might be a problem with healthcare challenges, and their causes are different, which need corresponding solutions, there is a universal problem of inefficiency. Inefficiencies perceived through manual reporting of fair claims, data silos in and between departments, tedious data standardization, and outmoded ways of communicating with the patients lower the efficiency of healthcare providers. The existence of such inefficiencies makes compliance, high-quality care delivery, and the adaptation to competitive pressures more complicated.
Capabilities of efficient automation of manual business processes and integration of information: The enterprise resource planning (ERP) systems are very useful in automating manual business processes and integration of information. ERP offers a coherent picture of previously isolated information in various units of healthcare facilities, allowing executives to efficiently execute clinical and administrative duties. Hospital administrators are permitted quick access to information that is important so that well-made decisions can be made. Better management and decision-making practices increase efficiency, promote quality care, minimize expenses, and establish a climate that favors growth.