The Evolution of Healthcare


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Table of Contents

The Evolution of Healthcare Systems & Interactions

Systems Revitalization

Digital Health Adoption

Care Convenience

The Growth of Telehealth

Data Management

Process Automation

Personalized Healthcare

The Evolution of Healthcare Systems & Interactions

The evolution of the healthcare industry is following one path: consumerization. In the post-COVID world, the focus has shifted from the large, complex conglomerate of the healthcare industry to individual healthcare consumers. Patients, now more than ever, want as much control over their own care as possible. To meet these expectations, healthcare organizations are focused on improving access and quality of patient care while lowering overall cost. The consumerization of healthcare can be condensed to six points of focus:
  • Systems revitalization
  • Digital adoption
  • Care convenience
  • Data management
  • Process automation
  • Personalized healthcare

Federal spending towards healthcare grew by 36% in 2020.


Systems Revitalization

The healthcare industry has been fighting an uphill battle with no end in sight. According to The American Hospital Association (AHA), hospitals and healthcare systems in the U.S. experienced over $202.6 billion in losses from March to June 2020. A year later, the AHA expects that more than a third of U.S. hospitals will maintain negative operating margins for the remainder of the year. As vaccine resistance persists and new COVID variants emerge, hospitals will continue to be tested. These circumstances coupled with the healthcare labor shortage creates a tremendous challenge. Mercer’s 2021 External Healthcare Labor Market Analysis shows a labor shortage of up to 3.2 million healthcare workers within the next four years.

The Association of American Medical Colleges estimates a national shortage of up to 124,000 physicians by the next decade. While the shortage of physicians is exacerbated by COVID-19, a major cause is the caps on Medicare-funded residency slots. While the number of medical school graduates has steadily increased, residency opportunities have remained stagnant since the late 1990s. In 2019, over 3,100 applicants lacked residency slots. The cap favors the dispersion of slots based on cost and reimbursement; lower-cost higher-reimbursement specialties outweigh primary care.

The shortage doesn’t stop with physicians, though. In 2017, more than 40% of all nurses were over the age of 50. To replace these nurses and meet increasing healthcare demands, the U.S. need to hire more than 200,000 new registered nurses (RNs) each year. According to The American Nurses Association (ANA), as of 2022, there will be more RN positions available than any other profession in the United States.

The post-COVID “new normal” ushers in the era of healthcare consumerization. The recovery, restoration, and revitalization of the industry relies on the successful execution of strategic initiatives like patient activation, the synergy of omnichannel offerings, innovative talent attraction and retention methods, consolidation and mergers, and investments in improved patient experience.

Digital Health Adoption

Digital health encompasses not only patient-first technologies, but the use of information from these technologies. Mobile health (mHealth), wearable devices, and telehealth are just three technologies within the digital health realm. The information gleaned from these technologies provides healthcare providers and physicians with the opportunity to maximize personalization across all channels.

While wearable devices provide key insights from the monitoring and collecting of a wide range of data, they serve preventive purposes as well. Many of the conditions plaguing healthcare consumers result from lifestyle decisions, i.e., high blood pressure, diabetes, and heart disease. These wearable technologies allow patients to set healthy goals while making decisions. Since these devices accompany the patient at all times while collecting data, they are an invaluable resource to physicians and healthcare providers.

A patient-first digital solution requires synergy between all channels. A consistent, personalized, omnichannel experience is quickly becoming a requirement, not a luxury, in the eyes of healthcare consumers. According to a 2021 survey by Avtex, over 70% of patients want their experiences with healthcare providers to be as easy as interacting with their favorite brands. To keep pace with increasing demands, healthcare organizations are investing in the technologies necessary to encourage patient independence through websites, mobile apps, and other digital channels.

The global digital health market size was valued at $96.5 billion in 2020 and is expected to grow at a CAGR of 15.1% from 2021 to 2028.

Grandview Research, 2021

Care Convenience

In April 2020, 44% of Medicare primary visits were conducted via telemedicine. This is an almost unbelievable increase from the .1% recorded just two months prior. While telehealth experienced its boom out of pure necessity, it’s not going away. As the industry makes the philosophical switch to “patient-first” consumerization, telehealth will be a key player due to its convenience and low-cost nature. Utilization of telehealth systems will continue to improve and expand as healthcare consumers demand hyper-personalization and convenience. As of 2021, The Centers for Medicare and Medicaid Services (CMS) has agreed to fund efforts in four states to expand telehealth and other services in rural areas.

Telehealth also provides relief for many adults experiencing chronic pain. According to the 2019 National Health Interview Survey (NHIS), over 20% of adults in the United States experience chronic pain. Furthermore, they estimated that chronic pain accounts for nearly $300 billion lost in productivity. Prior to the COVID-19 pandemic, physicians at the UCLA Comprehensive Pain Center conducted 2,948 telehealth appointments over the course of seven months. Researchers found that patients opting for virtual care saved an average of 69 minutes in traffic and $22 in gas per visit.

The Growth of Telehealth

According to the 2021 COVID-19 Mental Health Impact Report, mental health telehealth visits increased by 6,500% from January 2020 to February 2021. To further personalize this data, that is an increase from an average of 16,000 to 1,020,000 patients per month. While this report clearly shows the impact of the pandemic on mental health, it also shows that when mental healthcare is made more accessible, more individuals will seek treatment. Prior to the pandemic, it was estimated that less than half of patients diagnosed with a mental health disorder received treatment due to uneven dispersion of mental health specialists across the United States. As telehealth improves and expands, more healthcare consumers will seek treatment from specialists that were previously out of reach.


Clearly, consumers are not only becoming aware of telehealth but starting to demand access to it. It is become a part of the standard of care that should be made available throughout the country.

– Jonathan Linkous, CEO of the American Telemedicine Association

Data Management

The average healthcare consumer will generate the equivalent of over 300 million books of health data during their lifetime. Artificial Intelligence (AI) will soon be an industry standard as it provides recommendations based on detailed, personalized patient data at the fraction of the speed of a physician. As algorithmic data becomes more refined, AI will allow physicians to gain valuable insights while improving the access and quality of healthcare.

Prior to the pandemic, nearly all primary care physicians utilized electronic health records (EHRs). There is no evidence that this system of data storage improves patient care or reduces overall healthcare costs. In fact, the evidence reveals the opposite. A recent study found that only 27% of physician’s time was spent on face-to-face interaction with patients, while nearly half of their time was spent using EHRs. The heavy reliance on EHRs in primary care is associated with increased stress and decreased job satisfaction in physicians.

Healthcare organizations, in an effort to address the shortcomings of EHRs, have three options. They can purchase new technology to replace EHRs, hope for legislation that improves EHR capabilities, or modernize existing EHR capabilities by implementing technology such as robotic process automation (RPA). Utilizing data across multiple patient and caregiver touchpoints requires data architecture and infrastructures capable of sharing and protecting data for use throughout the patient journey. Artificial intelligence, machine learning, and innovations in data analytics and management will allow industry providers to utilize a data-driven approach across every aspect of healthcare.

80% of surveyed students, residents, and physicians stated that the utilization and collection of health app data would enhance care.

Stanford Medicine, 2020

Process Automation

The healthcare industry is estimated to have a 60% automation potential, meaning that nearly two-thirds of tasks could be completed using robotic process automation (RPA).

Since 2018, the pandemic has caused a 90% increase in hospitals with an AI strategy. Healthcare executives believe this increased automation will cut wasteful spending, allowing healthcare organizations to recover quicker. Aligning with the focus of hyper- personalization, 59% of these executives have already incorporated non-clinical data into their AI plans in an effort to provide preventive care based on risk factors and personalized predictions of future needs. These preventive health technologies save both healthcare providers and consumers from unnecessary costs, while increasing the quality of care.

Changes in the status quo threaten people who are wedded to the status quo. If you have a board in a particular state made up of certain kinds of old school physicians who are unwilling to accept the possibility that there are alternative methods of delivery that are as good or better than what they are familiar with, then there will be a problem.

– Stuart Gerson, former Attorney General

Personalized Healthcare

As the industry transitions from face-to-face to digital interaction, patient-centered healthcare is a necessity. A patient-first approach ensures that healthcare organizations provide quality care while eliminating any unnecessary costs. This approach requires caregivers, providers, and systems to have access to the data and resources to deliver a holistic experience that recognizes unique patient needs, potential challenges, and long-term preventive strategies.

According to a 2021 McKinsey survey, 41% of healthcare consumers felt that lack of clarity of information and instructions led to unplanned, high-cost follow-up care. If personalized information had been available on a convenient digital platform, patients could avoid the costs and risks associated with unplanned care.

The result of patient-first, personalized healthcare will have systematic consequences – bringing people dignity and delight without undermining healthcare organizations’ bottom lines. As patients gain increased access to self-monitoring, DIY solutions, medical research, and data on disease prevention, healthcare organizations and providers will need the tools and technologies to manage care delivery, follow up, and systems navigation to ensure a frictionless patient experience.


77% of respondents reported that the COVID- 19 pandemic has led them to pay more attention to their general health.

CVS Health Care Insights, 2021

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