The current state of the health care industry is marked by a mix of optimism and challenges. According to a recent survey by Deloitte, nearly 60% of health care executives hold a favorable industry outlook for 2025, up from 52% last year. This confidence is driven by expectations of revenue growth and improved profitability, with 69% anticipating a rise in revenue and 71% expecting better profitability[1].
However, the industry faces significant challenges, including workforce shortages and regulatory uncertainty. Health systems are particularly concerned with workforce issues, such as talent shortages and retention problems, which 58% of executives expect to influence their strategies in 2025[1].
In terms of market movements, healthcare mergers and acquisitions (M&A) are expected to see a resurgence in 2025. The trend of cross-region consolidation is expected to continue, with health systems looking for accretive growth beyond market-adjacent "tuck-ins"[2]. Additionally, private equity firms are accumulating substantial capital reserves and are eager to invest in healthcare, particularly in more fragmented markets like home health, behavioral health, and outpatient services[5].
Regulatory changes and market disruptions are also shaping the industry. The ongoing transition to value-based care models is prompting healthcare organizations to pursue partnerships aimed at enhancing care coordination and improving patient outcomes[5]. Furthermore, the rise of transformative technologies, including gen AI, is expected to have a significant impact on the industry, with health plans primarily focused on adopting these technologies and health systems focusing on strengthening their core legacy business technologies[1].
Consumer behavior is also shifting, with a growing emphasis on affordability and access to care. According to PwC, commercial healthcare spending growth is estimated to reach its highest level in 13 years, driven by inflationary pressure, prescription drug spending, and behavioral health utilization[4]. This trend reflects higher than expected utilization of certain drugs and higher acuity inpatient and outpatient utilization.
Healthcare industry leaders are responding to these challenges by prioritizing initiatives that support strategic partnerships, bolster competitive positioning, and enhance patient care. For example, health systems are focusing on developing growth strategies to increase revenue, while also addressing workforce challenges and regulatory uncertainty[1]. Additionally, healthcare executives are collaborating with seasoned M&A advisors to identify suitable targets and facilitate negotiations that yield fair value for all parties[5].
Overall, the health care industry is poised for change in 2025, driven by innovation, resilience, and strategic growth. While challenges remain, industry leaders are cautiously optimistic about the future, with a focus on driving growth while ensuring access to affordable healthcare for consumers.
