HBI’s Team Predictions for 2023
Drawing inspiration from prediction lists that make the rounds this time of year like this one from our sources, we asked some of our team here at HBI to pen down some of their thoughts on what we can expect over the next 12 months and beyond. So here are our top picks for news and trends HBI expects will colour 2023 – across hospitals, labs, elderly care, fertility, dentistry, coronavirus, digitisation and more.
Max Hotopf, Founder and chairman
I expect that questions and concerns around the COVID-19 vaccines, their efficacy and negative side-effects will not go away in 2023. The mainstream media blackout against any negative reporting is beginning to fade with more doctors’ concerns being spotlighted and more news being published in reputable sources journals. I think this will lead to a lot of discussion about the role of big pharma and the role of healthcare services more generally. With Europe moving to the left, there is also likely to be great scepticism about for-profit health care.
Lee Murray, Events director
Outpatient models – 2023 will see a continuation of the push towards doing more in an outpatient or a home setting. The drivers of national and international consolidation remain consistent with previous years and the cost of living and sky-high energy bills may see an acceleration for some independent practices looking to sell.
For chains in dentistry and ophthalmology, many questions will be raised about scale and efficiency. Does bigger always mean better or would reducing scale and increasing the efficiency of existing operations be a better driver for growth?
Brand will also play a key role in 2023. Expect to see more differentiation between low-cost and premium brands as groups seek to address new markets driven by long waiting lists, higher willingness to pay out of pocket and growth in subscription or employer-paid for care.
Expect to also see outpatient groups leveraging their model to grow into new sectors. Take Patria-owned Brazilian ophthalmology group, Opty as an example. It has taken the outpatient model to develop Grupo H Plus, a holding company that now provides ophthalmology, ENT, Urology and orthopaedics in Brazil with ambitions for the wider LatAm market.
Digitalisation – Having spent the last three years rapidly implementing, developing, and acquiring digital platforms and solutions, a crucial step for providers in 2023 is to take all that they have and piece it together. Interoperability of various systems and technologies had been top of mind but providers haven’t always managed to take a step back and fully organise various systems and start gleaning insight from the data they produce from systems like SAP’s S/4HANA.
Expect to see more and more groups launching their own patient platforms following a shift towards consumer-driven care and more personalised patient pathways. The debate as to whether to buy or to build digital capabilities will rage on but with new clarity on what works and what doesn’t as experience and competence grows.
Kirsty Withams, Head of Intelligence
Elderly care – Increase of elderly population across Europe and the subsequent increase in dementia will be costly and will mean there will need to be innovation in this sector as existing operating models will struggle. As a result we will see more investment in early intervention, group living and continuing care communities across Europe.
Fertility – Fertility is still a sure thing and there’s still lots of room for investment/investors in Europe. Convenience will drive this sector, whether that is more at-home testing, technology that allows more of the process to be conducted remotely, or just smaller satellite offices.
Dialysis – Dialysis is a sector that already collects incredible amounts of data and increasing numbers of companies will really embrace predictive analytics, particularly in medical intervention. Expect to see a shift in trends from hospital based dialysis to at home nocturnal dialysis. Quality of life is of paramount importance.
General – I wouldn’t be surprised to see more big tech involved across health care and more diverse investors. 2021 and 2022 saw traditional logistic companies invest in health care and I expect we will see more of this.
Martin De Benito Gellner, Senior Journalist/Analyst
Labs – Labs groups saw massive revenue growth in 2020 and 2021 due to becoming heavily involved in Covid testing. Many groups more than doubled their earnings. In 2022 revenues fell as Covid testing wound down, and this trend will continue in 2023. 2023 could be the first ‘normal’, i.e. post-Covid year for lab groups, as they gradually return to their pre-pandemic growth trajectories.
Labs groups in many countries will be adapting not only to the new post-Covid world but also to large tariff cuts and major regulatory changes, most notably the EU’s new regulation on in vitro diagnostics. But for the most part the flexible operators will be able to make necessary changes, through optimisation and increased automation of processes.
Exciting new types of tests will be introduced, mostly in genetics, and direct-to-consumer testing will also see rapid growth.
Michaila Byrne, Senior Journalist/Analyst
Elderly care – The biggest news story dominating headlines early last year was the Orpea scandal, and I expect this will continue into 2023. It’s hard to deny the ongoing reputational damage and fallout plaguing both individual EHPADs and the industry as a whole following the publication of Victor Castanet’s book ‘The Gravediggers’.
From the conversations I’ve been having with analysts around the world, it looks like 2023 could be the year when Orpea’s fate is finally sealed. Within French-speaking countries, the long-term implications are potentially devastating. However in others where French operators have largely consolidated the market, the outrage is noticeably quieter – minimal to non-existent in some cases.
Some analysts think a rebrand could be on the cards, many are optimistic about Orpea’s future and chance at a glorious comeback, but others predict this could be the end of the road and even present an opportunity for systemic reform across the sector. Unfortunately between government raids and shareholder infighting, the crystal ball is too foggy to make any concrete predictions on this ever-evolving saga. Watch this space.
Joe Quiruga, Journalist/Analyst
Hospitals – Three big trends are dominating the hospital market – inflation, M&A, and workforce.
In terms of inflation, 2023 will be the year where governments and PMI simply have to put their money where their mouths are for tariffs. Spain will see PMI premiums rise by about 50% according to one source and France and Germany aren’t making enough money from SHI tariffs as it is.
In M&A, smaller hospitals will be bought up, Ramsay may look to offload its troublesome French subsidiary to sweeten its package after the bid by KKR fell apart last year, and emerging market hospitals will be bought up by PE firms looking for rocket growth.
But the workforce may be a problem in both of these respects. For hospitals in developed countries, there isn’t enough labour to go around – necessitating investment in either labour-saving digital tech or more workers from abroad. In emerging markets, a workforce expert recently told us the quality of labour – with many of the most talented workers moving abroad – means there is a lot of risk in acquiring hospitals. Hospital groups and PE firms could control this work via direct negotiations with governments. Say you’re the president of Kenya – wouldn’t you invest in a nursing school if it was the difference between you getting a new shiny hospital group or Rwanda getting a new shiny hospital group?
What are your predictions for heath care in 2023?
We would welcome your thoughts on this story. Email your views to Michaila Byrne or call 0207 183 3779.
