Over the last few years, the healthcare industry has been navigating a volatile landscape shaped by changing market demands, labor shortages, inflation and supply chain difficulties. In 2025, several trends could continue to impact the sector, including workforce safety concerns propelled by staffing shortages and changing skills requirements, increased cyberthreats due to increasing technology reliance, ongoing efforts to secure medical supplies and medications amid supply chain challenges, and the risks associated with expanded telehealth use.

Considering these evolving dynamics, organizations should closely monitor developments to adapt their operations and risk management practices to ensure operational resilience, patient safety and compliance. This article provides more information on healthcare industry trends to watch this year and offers suggestions on how to navigate them.

Workforce Safety and Staffing Shortages

The healthcare industry faces an ongoing labor shortage driven by an aging workforce, turnover and burnout. In fact, professional services provider Deloitte noted that 58% of health system executives expect workforce challenges (e.g., talent shortages, retention, the need for upskilling) to impact their organizational strategies this year.

Labor shortages can increase employee injury rates and associated workers’ compensation exposures, as well as lawsuits regarding unsafe working conditions. This is because fewer workers may lead to employees having longer shifts and additional job responsibilities, placing them at greater risk of overexertion or repetitive motion injuries.

Additionally, staffing shortages can elevate healthcare organizations’ professional liability exposures. Overworked, stressed and mentally fatigued employees can be less alert and focused, making them more error-prone. In healthcare, such errors could lead to incorrect diagnoses or ineffective treatment methods and care, which threatens patient safety. The patients who receive improper care due to treatment errors or omissions, or their family members, could take legal action against the healthcare organization, holding it responsible for the resulting damages.

Healthcare organizations should implement measures to address these workforce challenges and mitigate associated risks. Strategies to consider include:

• Adequately planning to address staff shortages
• Implementing staff wellness programs with mental health support
• Offering more competitive wages and benefits packages (e.g., tuition reimbursement options, flexible work arrangements and additional paid time off) to retain and recruit workers
• Promoting a culture of safety that empowers workers to voice their concerns about job hazards, including those due to staffing issues
• Providing training and opportunities for upskilling

Leveraging technology, such as automation tools and electronic health records with clinical decision support, can further increase operational efficiencies, improve safety and help alleviate labor issues.

Cybersecurity Threats

Technological advancements continue to revolutionize the healthcare industry. Mobile health, health information technology, wearable devices, telemedicine, personalized medicine, artificial intelligence, robotic-assisted surgery, blockchain for secure data-sharing and predictive analytics are transforming patient care and medical decision-making.

However, these advancements can also introduce significant cybersecurity concerns. Since patient data is highly sensitive, it is an attractive target for cybercriminals. This has contributed to a rising number of ransomware attacks. For example, in its State of Ransomware in Healthcare 2024 survey, security solutions company Sophos reported that 67% of respondents were impacted by ransomware attacks in 2024, an increase from 60% in 2023. Beyond ransomware, other major threats include phishing attacks, insider threats and supply chain vulnerabilities, where hackers exploit third-party software or service providers to gain unauthorized access.

Cyberattacks that compromise patient data can also cause significant operational disruptions. Hackers may render systems inoperable, or organizations may be forced to shut down to contain and investigate the attack. This can hinder the ability to provide care to patients, schedule appointments, process payments and submit insurance claims.

Additionally, cyberattacks can lead to compliance issues related to the Health Insurance Portability and Accountability Act (HIPAA) or other data privacy laws. Organizations that fail to meet regulatory requirements may face significant fines, legal liabilities and lasting reputational damage, eroding patient trust.

To reduce these risks, healthcare employers should consider various strategies, such as:

• Implementing extensive cybersecurity measures (e.g., multifactor authentication, network segmentation and antivirus software) across its networks
• Thoroughly vetting their organizations’ third-party vendors and restricting their access to organizational data
• Consulting legal counsel to maintain compliance with applicable laws
• Requiring employees to document details diligently when using technology
• Regularly testing and reviewing the tools to ensure they’re functioning correctly
• Educating and training employees on proper technology use
• Conducting routine risk assessments with penetration testing to identify vulnerabilities
• Having a detailed incident response plan that can help establish timely response procedures to mitigate losses and determine appropriate actions following a cybersecurity event
• Securing adequate cyber insurance to provide coverage for these events and gain access to vendor panels with legal counsel and public relations firms experienced in handling data breach events

Supply Chain Resilience

Supply chain issues are expected to continue to create challenges for the healthcare industry in 2025. According to the American Hospital Association’s (AHA) Environment Scan Report, 80% of healthcare providers expect supply chain issues to remain the same or worsen this year. Additionally, 39% of providers reported that product shortages led them to reschedule or cancel procedures at least quarterly.

The shortages of essential medical supplies, medications and personal protective equipment can significantly impact patient care and provider safety. Moreover, healthcare organizations may experience financial losses due to price volatility and delays. The AHA report found that supply chain shortages are increasing care costs by $3.5 million annually for medium-sized health systems.

To address these risks, healthcare providers should consider the following methods to improve supply resilience:

• Diversify suppliers. Relying on single-source suppliers places an organization at risk for supply chain issues if those suppliers suffer a disruption or go out of business. By diversifying their suppliers, healthcare providers can mitigate the risks of disruptions that may only impact one area (e.g., natural disasters, trade issues), improve product quality through having access to multiple options, and reduce costs through improved efficiencies and competitiveness.
• Build inventory buffers. Having extra inventory available can allow healthcare organizations to continue their operations during a supply chain disruption. This can be essential for providing uninterrupted patient care during shortages. When building a buffer, it is essential to correctly calculate buffer levels by analyzing historical data.
• Use predictive analytics and supply chain monitoring tools. Technology can help mitigate supply chain disruptions that may occur. Predictive analytics uses data to identify trends and forecast future events, assisting decisions. Supply chain monitoring tools can provide real-time information on inventory levels, demand and shipments and allow healthcare providers to identify issues and adapt accordingly.
• Engage in collaborative risk-sharing agreements with vendors. Having risk-sharing agreements in place can mitigate supply chain risks, as these arrangements allow the vendors to share the financial burdens of supply chain disruptions. These agreements can also incentivize suppliers to seek solutions to challenges that may arise and allow for flexibility through price and order adjustment clauses.

Telehealth Risks

Telehealth has grown significantly in recent years, and several industry experts are anticipating its use to continue to expand. Telehealth services can offer benefits to both patients and healthcare organizations. For example, patients can utilize telehealth services to receive timely and simplified access to treatment for various injuries and illnesses. It can also be used to avoid issues that arise from obtaining in-person services (e.g., exposure to ill patients, difficulties navigating clinic hours, troubles finding specialized treatment and challenges traveling to medical facilities). In addition, healthcare providers can leverage telemedicine services to reach more patients, boost operational efficiencies, combat rising medical expenses, expand diagnoses and screening options, and enhance chronic disease management capabilities.

Despite these benefits, technological advancements can present significant risks for healthcare organizations. For example, they can raise cybersecurity concerns regarding patient data and secure communications. Additionally, virtual visits do not allow medical professionals to conduct thorough physical examinations, so they could miss crucial patient information, leading to misdiagnoses, delayed treatment and related lawsuits. Technology failures can also lead to malpractice claims. Furthermore, regulations are constantly changing, leaving healthcare organizations with substantial compliance exposures, especially as it pertains to cross-border licensing.

The following are risk management strategies healthcare providers should consider to mitigate telehealth risks:

• Partner with secure, HIPAA-compliant telehealth platforms to ensure patient confidentiality. Thorough vetting of technology vendors should also occur.
• Implement procedures to recommend in-person visits if a virtual visit does not yield sufficient information. Utilizing effective communication techniques is also vital.
• Coordinate telehealth visits with home care professionals and limit care fragmentation.
• Regularly train providers on telehealth-specific protocols to ensure they are up to date on the latest regulations and technologies.
• Maintain comprehensive liability insurance for virtual care and work with licensed professionals who can assess an organization’s needs and tailor their coverage accordingly.
• Monitor and adapt to evolving regulations and utilize legal counsel to ensure ongoing compliance.

Conclusion

Several trends will likely impact the healthcare sector in 2025. By monitoring these developments and responding accordingly, healthcare providers can mitigate their exposures and be prepared to navigate issues that may arise.

Contact INSURICA for additional healthcare industry resources.

This is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice. © 2024 Zywave, Inc. All rights reserved.