Growing demand for care and a rapidly aging population could drive U.S. healthcare spending to $8.6 trillion by 2035, more than 20% of forecast total U.S. gross domestic product.
With more than $5 trillion in annual spending and costs rising at unsustainable rates, healthcare executives need to rethink long-held assumptions about how care is delivered, funded and experienced, according to PwC analysts in a new report.
The healthcare industry is on the brink of a monumental shift where artificial-intelligence-driven, consumer-centric healthcare services could lead to simplified care models that lower costs and increase care quality, the analysts wrote.
Healthcare executives are familiar with the challenges of the current healthcare system—it’s expensive, fragmented and frustrating for patients and providers. Rising costs, fragmented care, administrative overload and demographic trends are putting pressure on the system.
Within 10 years, there will be more Americans over 65 than under 18, foretelling demand for chronic and geriatric care alongside a shrinking supply of healthier young workers to pay for it. About 45% of physicians report symptoms of burnout, and there is a projected shortfall of doctors in the next decade.
PwC analysts see an opportunity in the next decade for $1 trillion of annual healthcare spending to shift away from fragmented healthcare models that rely on brick-and-mortar facilities to what they described as empowered “super consumers” and a digital-first, personalized system of medical care. This shift could have a major impact on costs, quality and burnout.
The analysts are optimistic that, by 2035, healthcare can be proactive, automated, personalized and robot-enabled. But, they attest, healthcare leaders will need to shift their resources from outdated cost pools like administrative overhead and fragmented, infrastructure-heavy models into next-generation models such as AI-enabled intake and in-home care, according to the report.
Advancements in tech and AI can play a major role in this shift. AI-powered workflows can reduce administrative burden and clinician burnout while virtual-first platforms can make care home-centered and more accessible, PwC said.
Wearables, sensors and ambient tech enable continuous heath monitoring that can help shift care toward earlier intervention and remote delivery. Drone delivery will provide faster, last-mile care access, especially in remote and underserved areas. Genomics, digital twins and adaptive AI can drive more precision treatments and pivot healthcare from reactive to proactive, predictive and personalized care.
Healthcare organizations also need to invest in unified platforms integrating triage, diagnostics, navigation and reimbursement, the report said.
“Traditional players must commit to structural reinvention, leaving behind legacy systems in favor of intelligent platforms, hybrid workforces and outcome-based strategies,” PwC analysts wrote.
By 2035, if healthcare players make the right investment, PwC analysts envision caregivers could benefit from personalized in-home connected care hubs. The use of robots will expand, performing services, augmenting and enabling doctors, nurses and at-home care. Physicians will become data orchestrators using AI to triage risk, personalize care and focus on clinical judgment over administrative burden, while hospitals and physical sites of care shift from destinations to “high-speed care nodes built for brief, precise interventions tightly integrated with virtual-first systems.”
“As hospitals shrink to modular hubs designed for the most acute cases, most care shifts into the home, enabled by wearables, implantables and virtual command centers that orchestrate treatment remotely. AI, robotics and drones reconfigure labor by automating routine tasks, allowing clinicians to focus on complex interventions,” the PwC analysts wrote.
The analysts contend that payers, providers, pharma and health tech companies can gain a competitive advantage by leading this trend, but it will require a new strategy. That playbook includes being consumer-first, building care models that are “virtual by design,” investing in data intelligence and leaning on strategic partnerships.
“Digital-native care architecture, automatic intakes, fully virtual specialty clinics and AI-augmented diagnosis and treatment will become commonplace,” the PwC analysts wrote.
And healthcare organizations need to be primed for disruption.
“If you aren’t anticipating new entrants, you’ll be outflanked,” they wrote. “Adapt quickly as innovations, policies and platforms rewrite the rules and compete for reallocated dollars. Institutionalize disruption and adaptation by building agile teams that shift with innovation, launch internal pilots early, form tech and regulatory units to map changes and designate sandboxes for real-world testing of technology.”
PwC offered a picture of what the future of healthcare could look like by 2035:
Payers: With medical cost trend nearing double digits, payers will be expected to deliver far more with far less. AI and other technologies can help but are not a silver bullet. Payers will need to build capabilities to deliver medical value and actively manage population risk, coordinating directly, through expanded ownership, or indirectly across networks and supply chains that drive cost and affordability, according to the report. Payers will increasingly serve as data clearinghouses.
Going forward, heath plans will need to automate much of what they do today so they can “invest in new capabilities and assume a larger role as stewards of their members’ healthcare dollars,” the report said.
Providers: Health systems, hospitals and medical practices will pivot to AI-enabled, human-centered models that deliver affordable, personalized care. Care will decentralize and become acuity-adjusted, specialized and increasingly autonomous. New revenue models will emerge, eroding reliance on traditional fee-for-service. As digital natives age, they will direct their dollars toward AI-powered models that pitch more affordable, convenient and efficient care. Younger generations will favor care models that are immediate, low-cost and accessible from the device in their hand.
Medtech: The medtech industry will evolve from standalone hardware to intelligent infrastructure, the PwC analysts predicted. The next wave of differentiation will come from brain-computer interfaces between patient and device, remote monitoring, robotics and neuromodulation as software and connectivity define competitive advantage. Medtech companies will aim to be connectors of care with diagnostics and therapeutics converging into one seamless, adaptive system.
“The critical test for the future of health will be whether a major industry outsider—free from legacy infrastructure but armed with capital—will have the vision, insight and resolve to disrupt healthcare,” the analysts wrote.
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