From digital twins to health equity: Nine healthcare trends that will shake up 2024

By Nicole Witowski

It’s that time of year again. With the last slice of pumpkin pie polished off and 2023’s New Year resolutions in the rearview mirror (RIP, ambitious fitness goals), it’s time for our annual forecast about what the coming year will hold for the healthcare industry.

Over the next few weeks, we’ll dissect nine key healthcare trends that we believe will shape the landscape in 2024. These predictions touch on artificial intelligence, regulatory shifts, treatment innovations, retail giants, and other areas. Here’s a preview of what to expect. Stay with us as we dig deeper in the coming weeks.

1. Retailers work to crack healthcare with mixed results

Look for retail giants to double down on their healthcare ambitions in 2024, focusing on more complex care like chronic diseases. The past year saw newcomers like Costco enter the fray, while existing players like Amazon, Best Buy, and CVS Health refined offerings, despite recent setbacks. Will these retail giants finally crack the healthcare market? The jury’s still out, with some early wins but also stumbles. One thing’s for sure, though: As care becomes more consumer-oriented, we expect more disruption from retail giants that will take patients out of the traditional care path. This will create fertile ground for collaboration with traditional providers and care delivery startups.

2. A new generation of weight loss drugs will transform obesity care

The last few months have seen the obesity drug market boom after the blazing success of GLP-1 receptor agonists. Originally developed to treat diabetes, these drugs became headliners for their impressive weight-loss effects. Analysts predict global obesity sales could top $77 billion in 2030, fueled by rising obesity rates, unmet medical needs, and growing pharma and venture capital investment. In the coming year, watch for established players to pursue label expansions and vie for breakthroughs in oral formulations, fewer side effects, and longer-lasting drugs, while new entrants explore benefits beyond weight loss. Beyond the obesity market, the ripple effects of GLP-1s could stretch across industries, from medical devices to the food industry. But amidst the frenzy, the real test will be affordability, coverage, and long-term safety.

3. Digital twins in clinical trials

Clinical trials are the cornerstone of drug development, but their slow pace and high cost often stall progress. One major obstacle is finding enough qualified patients who meet strict inclusion criteria. This is where digital twins come in. The concept has been around for a while: it’s basically a simulation of real-world systems to predict their operation. In clinical trials, digital twins are virtual replicas of patients, tissues, and organs designed to predict treatment outcomes. Companies like Unlearn are already partnering with giants like Merck KGaA to bring digital twins into late-stage trials to speed up enrollment, paving the way for faster drug development. While still in its early stages within the life sciences, the undeniable potential of digital twins warrants our attention.

4. Hospital M&A market will heat up alongside regulatory scrutiny

Hospital mergers and acquisitions (M&As) are unlikely to abate in the coming year, despite the increasing heat from federal regulators. Several cross-market mergers closed in the last few months, with more on the horizon, including the Kaiser Permanente-Geisinger merger; BJC HealthCare-Saint Luke’s Health Systems merger; and the Froedtert Health-ThedaCare merger. States in the South with favorable certificate of public advantage (COPA) laws could clear the path for larger mergers, while distressed hospitals seeking lifelines will spark smaller and mid-sized deals. Overall, we expect the pace of M&A activity to tick up, but deals will be more cautious and calculated. Strategic objectives shaping long-term growth, such as filling capability gaps and diversifying care options, will become key drivers of M&A activity.

5. Drug price transparency comes into focus

Price transparency will become a major focal point in 2024, fueled by regulatory pressure like the Inflation Reduction Act (IRA) and competition from players like Mark Cuban’s Cost Plus Drugs that sell drugs for low, transparent prices. This year, Blue Shield of California dropped CVS Caremark as its sole pharmacy benefits manager and shifted much of its business to Amazon and Cuban’s drug company. Meanwhile, CVS Health announced a pricing model overhaul (that looks a lot like Mark Cuban’s pricing model), taking a step toward greater pricing clarity. As health plans, employers, and consumers all continue to push for transparency, look for pharmacy giants to explore similar models.

6. Food as medicine gains traction

Food as medicine could shift from fringe to focus in 2024. Mounting evidence suggests that medically tailored meals, groceries, and produce subscriptions can lower chronic disease risk. CMS has already approved Medicaid coverage for nutrition interventions in Massachusetts, Oregon, Arkansas, North Carolina, and New Jersey, and more states could follow. Health systems are joining the pot, integrating nutrition programs to manage diet-related diseases, while insurers like CVS Health (through Aetna and other plans), Elevance, and Humana add food benefits to their Medicare Advantage plans. As reimbursement pathways expand, expect more players to grab a seat at the table, with the goal of reducing costs. It’s a promising trend, but let’s call it a simmering pot, not a boiling revolution.

7. Health equity becomes a strategic priority

Health equity is becoming a regulatory reality, which will push healthcare and life science organizations to make it a strategic priority. For example, CMS introduced a new rule that requires hospitals to collect information on race and ethnicity. The agency also created a Health Equity Index (HEI) for Medicare Advantage plans, weaving health equity into Star Ratings formulas. Meanwhile, the FDA will require diversity plans from drug and device companies for late-stage clinical trials. Progress won’t be a sprint, but with these catalysts pushing health equity to the forefront, 2024 promises to be a year of meaningful strides toward a more equitable healthcare system.

8. MDMA and psilocybin could usher in a new era of psychedelic medicine

Psychedelics will demand attention on the treatment stage, with the U.S. moving towards increased access after harsh legal restriction. It’s a bold prediction but here’s why: MDMA stands on the cusp of FDA approval, potentially becoming the first new PTSD treatment in two decades. Legal psilocybin therapy just landed in Oregon, with other states like Colorado and Vermont hot on its heels. More than 50 public companies in the U.S. are developing psychedelic-like drugs, not just for mental health disorders like depression and anxiety, but for stroke, Alzheimer’s, and even traumatic brain injury. So, will 2024 be the year psychedelics become mainstream? No. But there’s a growing will to challenge the status quo, and psychedelics will be pushing the boundaries of therapeutic possibility.

9. AI’s promises materialize into real-world solutions

This one seems obvious. But enough with the AI hype, let’s talk real-world impact in 2024. We’ll see healthcare-focused AI graduating from research labs to real-world clinics, not just making promises, but delivering tangible solutions. One area ripe for immediate impact? Virtual scribes. Physician groups like Permanente Medical Group are already embracing these time-saving tools, which help ease the heavy burden of documentation. AI-enabled medical devices are also poised for growth, with FDA approvals rising. Clear frameworks, responsible development, and affordability will determine if they soar or sputter out on the runway.

Learn more

Stay tuned over the next few weeks as we unpack each of these trends, providing insights, analysis, and takeaways to help you navigate the changing healthcare landscape.

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