A comprehensive look at the breaking news topics that affected the U.S. healthcare system throughout 2024.
Editor’s note: Every week, the dail-eNews, a real-time email newsletter for those involved in the business of healthcare, covered the people, trends and topics that made headlines for the industry. The following are several stories of note for 2024.
Change Healthcare cyberattack
Change Healthcare, a data processing firm owned by UnitedHealth Group, was the target of a cyberattack by a ransomware group on February 21, 2024. The cyberattack knocked Change Healthcare offline, resulting in stolen patient personal health information, payment details, and insurance records.
After the cyberattack, some hospitals across the nation were largely unable to submit insurance claims and receive payments. The attack also made it harder for certain hospitals to provide patient care, fill prescriptions, and more, according to a statement from Rick Pollack, president and CEO of the American Hospital Association. Change Healthcare is one of the largest health payment processing companies in the world, and the cyberattack significantly impacted the cashflow of hospitals and health systems across the nation.
The cybersecurity incident served as a reminder of the interconnectedness of the U.S. healthcare system and the urgency of strengthening cybersecurity resiliency, according to the U.S. Department of Health and Human Services (HHS). The HHS has continued to work with the healthcare industry to close all remaining gaps from the Change Healthcare attack and prevent future incidents.
The cyberattack on Change Healthcare in February 2024 resulted in thousands of physician practices, hospitals, and pharmacies left unable to submit claims or receive payments. Many healthcare facilities found themselves unable to deliver care and facing financial collapse in the weeks following the incident, according to a September 2024 Journal of the American Medical Association (JAMA) report titled “Lessons from the Change Healthcare Ransomware Attack.”
In cyberattacks on health care facilities, downtime after an incident due to malware locking the system can significantly disrupt the delivery of care, posing a risk to patient safety. Facilities that do not have the reserves to ease the cash flow issue until payments resume may be forced to close permanently, according to the report.
Healthcare organizations hurt by CrowdStrike
This summer, a faulty CrowdStrike update took millions of Microsoft systems offline, including those used by healthcare organizations.
A global technology outage began in the early morning of July 19, 2024, and went on to affect many industries and systems across the nation from aviation, private business, and much more. The outage had varying impacts on hospitals and health systems across the country. The outage, caused by a faulty software update issued by the cybersecurity firm CrowdStrike, is widely used by health systems that run on Microsoft computers, according to the American Hospital Association (AHA).
Some hospitals experienced little to no impact from the outage, while others had significant disruptions to medical technology, communications and third-party service providers. The disruptions resulted in some clinical procedure delays, diversions or cancellations. Impacted hospitals worked to implement manual restoration of systems and the CrowdStrike patch, according to the AHA, and affected hospitals implemented downtime procedures to ensure that disruptions to patient care were minimized.
The unprecedented IT outage revealed that all industries must better prepare for third-party technology disruptions. Within healthcare, the outage caused many healthcare providers across the nation to lose access to electronic health records and other critical healthcare systems.
Global disruption to the scale of the CrowdStrike update serves as a lesson to the healthcare industry specifically of the vulnerability of technology and raises ongoing questions about our health system’s operational preparedness during mass outages.
Navigating the physician shortage
The United States is expected to have a shortage of up to 64,000 physicians by the end of 2024, according to a McKinsey & Company and AAMC survey. Current projections indicate that the physician deficit could grow to 86,000 by 2036. The COVID-19 pandemic exacerbated the already substantial levels of burnout among physicians, contributing to unprecedented departure from the industry. Healthcare organizations must find new ways to attract and retain physicians to keep up with patient demand.
The Physicians Foundation issued data in 2024 showing that the state of well-being remains critically low for physicians, with healthcare consolidation exacerbating the issue. Its latest survey, 2024 Survey of America’s Current and Future Physicians, unveils the urgent need to improve physician well-being and center physicians’ perspectives in today’s rapidly evolving healthcare landscape. Key findings include six in 10 physicians and residents, and seven in 10 medical students reported often experiencing burnout. Additionally, more than half of physicians know of a physician who has ever considered, attempted or died by suicide, according to the report.
Safeguards for physician burnout identified by physicians, residents and medical students in the report included preserving physician autonomy, maintaining patient standards, increasing transparency and disclosure, and assessing long-term impact of healthcare consolidation.
The potential of AI
Artificial intelligence continued to make gains in its usage with healthcare, not only clinically but in the supply chain as well.
New research reveals more hospitals and health systems are investing in artificial intelligence (AI) to improve RCM. Sage Growth Partners (Sage), a healthcare growth strategy and marketing firm with expertise in market research, released data findings indicating that health systems and physician practices plan to invest in AI for future revenue cycle success.
Sage conducted a survey, showing results that overwhelmingly revealed that more health leaders indicated that they are planning to invest in AI for RCM within the next 1-3 years, and are expecting AI to be widespread in revenue cycles in 5 years.
Survey participants also indicated that the power of AI effectively addressed some of the most pressing RCM issues including patient payment estimations, coding, charge capture,
cash flow, payer payments and denials prevention/management.
Meanwhile, BD announced new data that highlights how advanced artificial intelligence technology can help health systems better identify controlled substance diversion in the operating room. Hospital drug diversion occurs when a health care worker “diverts” opioids or other controlled substances away from patients for personal use or sale, according to BD. The operating room is one of the highest risk areas for the diversion of controlled substances, such as narcotics used for anesthesia and pain management.
A new research study conducted at an Ochsner Health medical center and published in the American Journal of Health-System Pharmacy (AJHP) shows that the use of artificial intelligence in BD’s AI software can help highlight blind spots about the movement of medication in the operating room that often go undetected by current processes.
The BD system uses artificial intelligence and advanced analytics to provide visibility into the behaviors of individuals interacting with medication storage and management and pharmacy systems. There is a critical need in these spaces for AI to manage large, complex health systems with hundreds of points of controlled substance dispensing.
RhythmX AI and Sentara Health built a revolutionary hyper-personalized primary care platform in 2024 for clinicians and patients. Through RhythmX AI’s predictive and generative AI platform, Sentara Health primary care clinicians have access to clinical actions directly from the relevant clinical and payor guidelines, earlier disease detection, underlying EMR data analyses,
Artisight, Inc. first implemented its AI software at WellSpan’s Surgery and Rehabilitation Hospital in August 2023 and announced an expansion of its collaboration with WellSpan Health this year in 2024. The new program will bring the remote nursing, remote observation, and AI services through Artisight’s Smart Hospital Platform to just over 1,000 total beds across the WellSpan Health system.
WellSpan worked with Artisight to train algorithms to respond to these specific needs in the hospital’s unique setting. The subsequent pilot program produced surprisingly positive results, according to a February 2024 press release, including a 15% decrease in patient falls, 21% improvement in patient experience scores related to nurse communication, and an 11% improvement in RN turnover.
Owens & Minor, Inc. announced a partnership with Google Cloud in September 2024 that combines Owens & Minor’s healthcare supply chain expertise with Google Cloud’s Vertex AI platform, and is aimed to enhance QSight®, a cloud-based clinical inventory management system from Owens & Minor. The partnership between Owens & Minor and Google Cloud allows QSight to help hospitals and health systems optimize how they manage the thousands of medical-grade supplies, high-value surgical implants and human tissue products required for patient care.
The technology also allows providers to more efficiently manage inventory with real-time visibility and predictive capabilities that are needed to effectively oversee complex healthcare supply chains. This technology serves to lower costs, decrease workloads for clinical staff, and help physicians make more data-based healthcare decisions
Inflation
The pressure on health systems to manage costs continued through 2024, while they navigate regulatory changes and focus on delivering high-quality patient care. The current state of healthcare value analysis (HVA) was revealed in a healthcare industry-wide survey from Global Healthcare Exchange (GHX) and the Association of Healthcare Value Analysis Professionals (AHVAP).
One of the critical challenges revealed in the survey is the persistent gap in physician engagement. Despite efforts to involve physicians in value analysis processes, 85.11% of respondents reported “less than strong” engagement. Strengthening collaboration with physicians by facilitating evidence-based discussions is essential to achieving both clinical and financial alignment.
The survey also highlighted challenges, such as the potential knowledge drain within the HVA workforce. With nearly 20% of HVA professionals possessing over 16 years of experience and many approaching retirement, this knowledge drain could create a significant experience gap. Nearly a third (29.69%) of respondents have 0-3 years of experience in the field, emphasizing the urgent need for mentorship and knowledge-sharing programs to sustain the sector.
Vizient, Inc. released its summer Pharmacy Market Outlook in July 2024, estimating the 2025 overall drug price inflation rate for pharmaceuticals to be at 3.81%. This estimate is based in part on expanding indications of previously approved medications, such as semaglutide, which increased 77% in spend since the summer 2023 Outlook.
The report also urges providers to prepare for an increased number of high-cost cell and gene therapies entering the market that will significantly impact provider budgets and operational processes.
Currently, FDA-approved gene and cell therapies range in annual wholesale acquisition cost (WAC) from $250,000 to $4.25 million for a single dose, according to Vizient. Vizient’s Outlook notes that there are close to 300 cell and gene therapies currently in clinical trials across several disease states.
Hurricanes and port strike
In the fall of 2024 the U.S. healthcare supply chain had to respond to two natural disasters – Hurricanes Helene and Milton – and a man-made one – a worker’s strike at U.S. ports.
Hurricane Helene brought tremendous damage to several states in the Southeastern United States, including North Carolina, where a Baxter facility that produces a significant portion of the U.S. IV fluid supply was temporarily closed due to storm damage. Baxter and several other manufacturers of IV solutions announced plans to ramp up production, while healthcare providers executed conservation strategies.
Baxter announced in mid October that more than 2,500 North Cove employees returned to work at normal pre-hurricane staffing levels. The Baxter team was working alongside more than 1,000 remediation contractors that have been engaged for site recovery. An employee support center established near the North Cove site continued to provide basic supplies, such as food, water, and toiletries, and more necessities, and colleagues at multiple Baxter sites across the U.S. have initiated clothing drives to collect cold weather gear and other items for the North Cove team, according to a Baxter press release.
The Baxter International Foundation has also donated nearly $3.7 million to support employees and communities impacted by Hurricane Helene, including $1.5 million in grants to three humanitarian partners and more than $2 million in funding to employees through Baxter’s Employee Disaster Relief Fund.
Meanwhile, the Longshoremen’s Association and the United States Maritime Alliance announced in early October they had agreed to a tentative deal on wages, ending a nerve-wracking port strike that affected businesses throughout the nation, according to CNBC. The existing contract between the organizations has been extended through January 15 to provide time to negotiate a new one. The strike was the first by the ILA since 1977, and it impacted operations at 14 different ports.
The strike had already started to impact the U.S. supply chain, with thousands of containers being brought to the wrong ports, and billions of dollars worth of goods anchored offshore because ports were not operational, according to CNBC.
By the Numbers: Change Healthcare
2.5 billion
UnitedHealth Group (UHG), parent company of Change Healthcare, recorded $2.5 billion in total impacts from the February 2024 cyberattack (according to the company’s third quarter earnings), based on data from Healthcare Dive. UHG has continued to deal with the fallout from the cyberattack on its subsidiary Change Healthcare throughout Fiscal Year 2024. The company decreased its adjusted net earnings outlook to $27.50 to $27.75 per share for this year, compared with its previous $27.50 to $28 range, according to an October 2024 report.
94%
94% of hospitals experienced financial impacts from the Change Healthcare cyberattack in February 2024, with more than half reporting a significant, serious impact to their operations and financials, according to an American Hospital Association (AHA) report released in March 2024. The AHA survey additionally found that 74% of hospitals reported direct patient care impacts as a result of the cyberattack.
1/3
Estimates from UnitedHealth Group CEO Andrew Witty revealed in May 2024 that the data breach resulting from the Change Healthcare cyberattack may have impacted approximately one-third of all Americans. The incident took “several months of analysis,” according to Witty, to determine all of the impacted parties and notify them. The Change cyberattack sheds light on the healthcare industry’s reliance on online technology systems and the need for better data protection systems for patient’s personal information.
By the Numbers: CrowdStrike
8.5 billion
8.5 million Windows devices went back online in late July 2024 after a global outage caused by a faulty update from the IT company CrowdStrike, associated with Microsoft. Microsoft confirmed that nearly 8.5 million Windows devices were taken offline by a faulty update sent out from CrowdStrike in July. 8.5 million devices represent less than one percent of all Windows devices, according to Microsoft, but CrowdStrike products are used by some of the world’s most critical organizations including airlines, federal agencies, hospitals, banks, emergency services and more, and were significantly impacted by the outage.
911
Some states reported that their 911 call centers were impacted by the CrowdStrike outage in July 2024, impacting the ability to make critical medical emergency calls. The U.S. Emergency Alerts Systems said during that during the incident, 911 lines in multiple states were down because of the outage. Impacted states included Alaska, Arizona, New Hampshire and Ohio, wherein downed 911 lines severely impacted patient services before they were ultimately restored, according to Forbes.
$20 billion
In early August of 2024, CrowdStrike stock was down almost 14%, shaving $20 billion off of the company’s marketing capitalization, according to business news source Quartz. The impacts of the July 2024 CrowdStrike technology outage likely also caused widespread negative financial impacts on the outage’s affected businesses across the U.S.
By the Numbers: AI
Three
Artificial Intelligence (AI) is now being used as a vital technology across the continuum of healthcare, according to the Mayo Clinic. A report from the National Academy of Medicine identified three potential benefits of the use of AI within healthcare, including improving outcomes for both patients and clinical teams, lowering healthcare costs, and benefitting overall population health. AI has been shown effective in preventative healthcare, according to Mayo Clinic, such as producing cancer screening results faster, and also as a risk assessment tool for identifying potential health conditions.
2025
The U.S. Food and Drug Administration (FDA) has now authorized nearly 1,000 new AI-enabled medical devices. The healthcare industry, however, still has many unanswered questions about the technology, including how to monitor the performance of algorithms that can adapt over time, and how to regulate generative AI tools. One of the FDA device center’s top priorities for its fiscal year 2025 is a draft guidance on AI lifecycle management and market submission recommendations for AI-enabled device software functions within healthcare.
90%
The results of a University of California San Diego School of Medicine study, published in October 2024, found an AI system using large language models (LLMs) can accurately process hospital quality measures, achieving 90% agreement with manual reporting, which could lead to more efficient and reliable approaches to health care reporting. Study researchers found that advanced artificial intelligence (AI) could potentially lead to easier, faster and more efficient hospital quality reporting while retaining high accuracy, which could lead to enhanced health care delivery overall.
By the Numbers: Inflation
2.2%
Prices for medical care increased by 2.2% between March 2023 and March 2024, and the prices of all goods and services increased by 3.5%, according to an updated analysis from KFF and the Bureau of Labor Statistics (BLS) data. Prices for hospital services and related services rose – both inpatient (6.9%) and outpatient (8.3%) – as well as for nursing homes rose faster than for prescription drugs and physicians’ services (0.4% and 0.7%, respectively), according to KFF.
$25,500
The cost of employer health insurance rose 7% for a second year, according to The Wall Street Journal and a survey from the healthcare nonprofit KFF. Back-to-back years of healthcare insurance cost increases have impacted the average cost of health insurance for U.S. families. In 2024, average healthcare insurance costs reached roughly $25,500 for employees and workers across the U.S.
7.1%
The average age of capital investments for medical equipment and infrastructure, after years of remaining relatively flat, increased by 7.1% for all hospitals in 2023, according to data from Strata Decision Technology and an American Hospital Association May 2024 report. Increasing costs of critical supplies continue to impact patient care within hospitals and further contribute to rising inflation levels seen during 2024.