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12 market signals we're watching in 2023 (part 2)

Last week, I wrote about six signals from the policy and investment communities that we think are worth watching in 2023. Today we’ll talk about six more, focusing on the human side of the healthcare industry: the signals that we’re getting from the workforce and the patient population.

What this signals: In the face of: rising burnout; increasing levels of workplace violence; widespread short-staffing; and growing acknowledgement of the need to address shortfalls in diversity, equity, and inclusion efforts; nurses are rightfully demanding more from their employers. Compensation increases are an important part of those demands, but the list of asks is as much about non-monetary commitments as financial ones. Keep in mind: The above forces are manifesting most intensely (and in some cases, entirely) on the inpatient side. The nature of bedside nursing—already under strain pre-pandemic—has fundamentally and permanently changed. And the size of the inpatient nursing workforce has shrunk, a trend that shows no sign of reversing anytime soon. What it doesn’t mean: That we’re seeing a rise in unionization. Total union membership is actually down (because the nursing workforce has shrunk), although the proportion of the nursing workforce that is unionized has held steady. What’s important is what nurses are demanding, not how they are demanding it.

What this signals: Physician burnout actually declined in the early months and years of the pandemic (perhaps due to a renewed sense of purpose and a well-deserved boost in public sentiment). But that trend reversed sharply last year as physicians grappled with many of the same challenges facing the nursing workforce, raising the possibility that the industry could be on the cusp of a physician turnover wave. Keep in mind: Early evidence suggests that physician turnover has held steady so far—and amid past spikes in burnout.

What it doesn’t mean: That we’re on the cusp of a physician attrition wave. On the one hand, physicians may certainly shift around among practice settings; physicians today have more employment options than ever before as health plans, private equity firms, and large, cross-geography physician practices all offer alternatives to traditional independent practice or hospital-based employment. However, physicians are less likely than nurses or non-clinical staff to leave the healthcare field entirely–it’s too difficult to find attractive alternatives with compensation sufficient to offset the cost of physician education and training.

What this signals: Despite their many challenges, this industry’s labor force wields outsized influence right now. Employers are more willing than ever to come to the negotiating table to attract and retain talent. Keep in mind: These power dynamics vary significantly across industry sub-sectors. Some sectors, particularly digital health and technology companies, have been forced to lay off significant portions of their workforce in the face of a worsening economic climate.

What it doesn’t mean: That the workforce feels empowered right now. Again: Rates of burnout and depression have never been higher. It will take some time for the workforce as a whole to feel the positive impacts of any changes they manage to win at the bargaining table.

What this signals: Consumer purchasing power is declining, and that means increases in care avoidance. Early survey data suggests that cost-related delays in care are already mounting and may even be surpassing levels seen during the 2008-09 financial crisis. What it doesn’t mean: That we’re on the cusp of a new consumer-driven era for healthcare, at least not beyond where pre-existing trends (that is, slow and uneven) were already headed. The recent influx of new transparency regulations has done little to put actionable information in front of patients. While patients may be more motivated to shop for care, their ability to do so has remained largely unchanged in the past decade.

What this signals: While this milestone is more symbolic than anything else, it does herald the beginning of new era for Medicare, one that will not only invite additional scrutiny to MA spending, but also require reforms to the very structure of Medicare payments as a whole, given that they are currently tied entirely to the Traditional Medicare population—a population that will come to represent a smaller and smaller minority in the coming years. What it doesn’t mean: That a major overhaul of either Medicare Advantage or Traditional Medicare is imminent. There are no laws or regulations that prompt immediate change when MA enrollment surpasses that of Traditional Medicare. Reforms are likely to be gradual and incremental.

What this signals: Both Traditional Medicare and Medicare Advantage will face a growing challenge in the coming years: how to adapt financial and care delivery models that were designed for a younger, healthier senior population for one that is growing older, with more complex care needs. As the Baby Boomers age, more of their utilization will tilt from procedural and preventive in nature toward care that is highly medical in nature. We believe this coming “case mix shift” is perhaps the most underestimated change underway in the healthcare industry today. Keep in mind: This challenge would be easier to navigate were it not for larger demographic trends: the relatively small size of the Generation X population (which means relatively less demand for more profitable procedural care), the increasingly poor purchasing power of Millennials (which means higher levels of care avoidance), and the small size of Generation Z (which means a smaller labor pool to pull from in the future). What it doesn’t mean: That there’s a profitability “cliff” approaching—for either the providers that rely on procedural care to cross-subsidize less profitable medical cases, or for the health plans that rely on Medicare Advantage to cross-subsidize less profitable lines of business. This shift will be slow and gradual, but it will also be long-standing. The aging of the Medicare population will continue for the next several decades.


We’ve chosen these 12 signals not only because we believe they are consequential developments in and of themselves, but because they intersect to reveal larger “messages” about how the industry is likely to evolve in the future. We’re currently writing up a summary of the eight insights we think will define the industry in 2023 and beyond—that report will be available to Union members later this month. If you’re interested in membership, please don’t hesitate to reach out to us at, or contact me directly at


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