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Home ยป Cautious pessimism – what is not spoken and what it means for healthcare
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Cautious pessimism – what is not spoken and what it means for healthcare

adminBy adminMarch 16, 2025No Comments4 Mins Read
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Healthcare conference season is on track. Two of the two events in Nashville last month and HIMSS held in Las Vegas this week have just passed, and many of the themes are familiar. Artificial intelligence has found a way to every conversation. Even as vendors are pushed to show more specific plans to achieve improvements and ROI, there is continued excitement about the impact that technology will have on health systems and hospitals.

But under the surface, there is something else this year, and I don't know if it is paying enough attention: anxiety.

The new administration has shown the intention of two policy directions that will put a lot of pressure on health systems that are already struggling to promote positive margins.

First, some reductions in CMS programs' funding, which could possibly begin with Medicaid, will have a negative impact on revenue, cash collection, and potentially capacity in some regions. Many healthcare systems rely on Medicaid for a significant amount of revenue, and at the same time benefit from it being one of the quickest refunds. If there are fund cuts in the Medicaid program and fewer Americans have low health insurance coverage, it also moves the health system that needs to be provided to uninsured patients to “emergency” care.

There is much more to say about the potential impact on overall hospital performance and patient outcomes, but there is certainly a decline in revenue.

Second, a shifting policy on trade would result in increased costs for hospitals. Many things that hospitals depend on every day are imported. This comes in large quantities from China. Increased tariffs at any level reduces costs. Core building supplies such as steel and wood increase capital costs for those with renovation or expansion plans.

Whether or not there is positive intention behind trade strategies, hospitals are positioned to lose combat as costs rise due to necessities.

This is all discussed, but explained in quiet voices and private discussions. Even something similar to political debate is dangerous these days, and people may be cautious to avoid conflict.

But it really doesn't matter what your political integrity is, whether you agree with the direction of the policy, or frankly, how much has been implemented, and what the outcome is. The main concerns right now are the uncertainty and uncertainty that they drive.

Here are three important impacts that we think will be seeing in 2025.

(Even) Slow decision-making – If health system CFOs are presented with the possibility of a decline in revenue, a decrease in collection, or an unknown increase in costs and expenses, what can be treated as “discretion” may be delayed or suspended. Only the most essentials of the project will proceed in most systems. One of the most important metrics is the number of “cash days” that supports operations. That cool AI project probably won't happen anytime soon unless it's tied to some stiff, proving savings.

Technical Integration – We have already seen signs that healthcare systems need to focus on reducing technical sprawl. The surge in point solutions creates isolated workflows that rely on multiple technologies, and in some cases even multiple “AI solutions” that contribute to the steps of the same workflow. Technology maintenance costs are increasing, and all contract renewals are receiving more reviews as health systems seek cost and workflow efficiency.

Vendor Calculation – If spending is slower and updates are under more scrutiny, the competition for new revenues becomes even more intense. Many healthcare vendors rely on venture capital money for their growth plans. This is a source that has already proven to be anxious about the speed of healthcare. If investors are more cautious and earnings slower, this year we have been able to find many of our previous stage vendors making tough decisions.

2025 is off to an interesting start, with a big reason for optimism from a technology standpoint. The lessons learned and shared by some of the industry leaders are exciting and some clear opportunities have developed. There are many benefits for those who can navigate uncertainty over the coming months.

You need to see what happens in the meantime.

Photo: Bernie_Photo, Getty Images

Jason Taylor is the SVP of Panda Health's growth and has driven the adoption of 30 years of transformational technology. From Canada, Jason has rapidly developed his passion for the potential of the US healthcare industry and has worked with renowned health systems in digital solutions to improve access, experience and outcomes over the past eight years.

This post will be viewed through the Medcity Influencers program. Anyone can reveal Medcity News' healthcare business and innovation perspectives through Medcity influencers. Click here to find out how.



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