Healthcare Challenges in 2025: Key Issues Shaping the Future of Global Health

As the US and countries worldwide ramp up their investments in 2025, the focus is firmly on tackling key healthcare challenges.

But just how big is this industry?

In 2023, the global healthcare market was valued at 21.22 trillion USD. And by 2032, it's projected to nearly double, reaching an incredible 44.76 trillion USD—growing at an annual rate of 9.07%. (Source)

This immense growth in the healthcare sector is accompanied by evolving patient needs and rapid tech advancements.

However, despite impressive growth, this industry still faces many challenges. Failing to tackle these issues could impact patient care and damage healthcare systems' reputations.

And therefore, understanding the key challenges in healthcare is crucial for building resilience and preparing for the future.

In this article, we'll explore challenges in the healthcare industry in depth.

Let’s dive in!

1.    Rising Healthcare Costs.

As per the data from National Health Expenditures (Source), in the U.S. alone, healthcare spending has increased over the years:

➢     In 1970, spending was 74.1 billion USD.

➢     By 2000, it rose to 1.4 trillion USD.

➢     In 2022, it reached 4.5 trillion USD.

Due to the pandemic, this spending surged by 10.6% in 2020 and grew by another 4.1% from 2021 to 2022.

Factors Driving High Costs

Healthcare costs are rising worldwide due to multiple factors, including:

➢     Health insurance strategies.

➢     Rising drug prices.

➢     Medical professional salaries.

➢     Profit-driven medical facilities.

➢     Types of medical practices and pricing strategies.

Health Insurance and Spending in the U.S.

Globally, people rely on health insurance to cover medical expenses. The U.S. leads the world in healthcare spending per person, with most Americans depending on private health insurance. In FY 2023:

➢     Private insurance covered about one-third of healthcare spending.

➢     Public programs like Medicare and Medicaid accounted for 22% and 18%, respectively.

As of 2020, per capita healthcare costs in the U.S. exceeded 12,000 USD, while the average personal income was around 54,000 USD. Out-of-pocket expenses have also risen, surpassing 1,000 USD per person annually in recent years.

Impact of Rising Costs

Rising healthcare costs have far-reaching effects on:

➢     Global health expenditures.

➢     Government spending on health insurance.

➢     Private health insurance premiums.

➢     Affordability of healthcare for patients.

➢     Out-of-pocket costs.

These financial pressures strain hospital services, impacting staffing and resources. Many hospitals have turned to costly contract labor due to clinician burnout and staff shortages, further driving up costs.

From 2019 to 2022, hospital expenses per patient increased by 22.5%. As a result, some hospitals have resorted to layoffs and staffing cuts.

Strategies to Manage Rising Costs

●       Regulating Private Insurance Plans: Implementing government policies to control private healthcare insurance costs and bring transparency.

●       Adoption of Virtual Care: Leveraging technology in health practices and bringing telehealth to reduce expenses and improve access.

●       Going in for value-based payment models: Focussing on linking provider payments to patient outcomes instead of service volume.

●       Cost-Control Measures: Regulating hospital operations and drug pricing to curb unnecessary spending.

2.    Workforce shortages and burnout.

Workforce challenges, including burnout and staff shortages, are another concern for hospitals worldwide.

The healthcare workforce especially suffers from burnout, which is characterized by prolonged workplace stress and physical and emotional exhaustion. Some reasons for this are patient surges, administrative burdens, and workforce shortages.

Burnout can also lead to higher absenteeism in staff, low productivity, mental health problems, and declining job satisfaction among medical professionals.

In 2019, before the COVID-19 pandemic, a considerably lower percentage of physicians and nurses (between 35 and 54 percent) reported burnout symptoms. Since September 2020, the number of healthcare personnel reporting exhaustion and burnout increased to (49 to 76 percent) (source), with more than one-third considering leaving the profession today (Source).

America is also experiencing a significant workforce shortage in the healthcare sector, especially in underserved communities.

Since 2005, nearly 200 rural healthcare facilities have closed, and another 600 are at risk of closing. These closures are due to rural hospitals' inability to compete with urban hospitals for higher salaries and better working conditions.

This trend is expected to impact the healthcare industry in the future significantly. Patients in rural areas will have to travel greater distances to access necessary care, ultimately resulting in poorer health outcomes.

Effective interventions to handle workforce shortage and burnout

●       Managing healthcare workers' workload to reduce their burnout is the key. Hospitals must limit their duty hours, ensure adequate staffing, and offer them flexible work schedules.

●       Encourage individual-focused interventions like mindfulness and stress management to combat burnout.

●       Provide access to professional development, training, and autonomy at work to increase engagement and motivation.

●       Promote a healthy work-life balance through rest periods and opportunities for personal growth outside work.

●       To tackle the workforce shortage, adopt technology, like a virtual care solution that blends human capital and technology, or use AI and robotics wherever it is necessary. 

●       Take appropriate measures to boost employee retention.

●       Seek travel nurses.

●       Conduct training programs for employees and plug inefficiency gaps.

3.    Eldercare & aging population.

According to the World Health Organization (WHO), by 2030, one in six individuals worldwide will be 60 years or older. The global population aged 60 years and above is projected to rise from 1 billion in 2020 to 1.4 billion.

By 2050, the number of individuals aged 60 years and older is anticipated to double, reaching 2.1 billion. Furthermore, the population of individuals aged 80 years or older is expected to triple from 2020 to 2050, reaching 426 million. (Source)

Challenges for the U.S. Healthcare System

In the United States, the proportion of individuals aged 65 and older is expected to reach approximately 23% by 2060. This demographic shift poses challenges for the healthcare system, including:

➢     Rising Healthcare Costs: Older people require more medical attention, leading to increased expenses for chronic illness management, specialized care, and related needs.

➢     Higher Disease Susceptibility: Aging populations are more prone to illnesses such as heart disease, diabetes, arthritis, and dementia, necessitating advanced technology and specialized care.

➢     Shortage of Geriatric Specialists: Despite the growing demand for geriatric care, there is a critical shortage of doctors specializing in this field.

Financial Strain on the Elderly

The high costs of healthcare, combined with Medicare's limited coverage for long-term care, place a significant financial burden on older people.

➢     Many seniors struggle to afford essential care, leading to declining health and reduced quality of life.

➢     Long-term care services, such as assisted living and in-home care, are often financially inaccessible for many families.

Quality of Long-Term Care

Even when care is available, the quality of long-term care services is often compromised due to:

➢     Insufficient staffing.

➢     Overworked personnel.

To address the challenges of senior healthcare

●       Make necessary policies and reforms, keeping older people in mind.

●       Take steps to make healthcare more accessible and affordable for senior citizens.

●       Invest in health technology to enhance accessibility, particularly for seniors in rural areas and those facing physical barriers to seeing a doctor.

●       Advocacy for mental health services and social programs to combat senior loneliness is also vital.

●       Policymakers should focus on training and recruiting a high-quality workforce, particularly professionals specialized in elderly care, to meet the growing needs of the aging population.

4.    Barriers to Health Equity.

Health equity means ensuring that no one faces unfair or preventable differences in their health outcomes, regardless of their background or circumstances.

Ensuring health equity is a critical challenge. Disparities based on race, background, ethnicity, or circumstances are widespread and influenced by factors both inside and outside healthcare systems.

In many marginalized groups, factors such as higher poverty rates, pollution, crime, language barriers, and limited access to green spaces contribute to these disparities.

Additionally, barriers to affordable, high-quality healthcare make it more difficult for people of color to access the care they need. They are more likely to be uninsured, postpone treatment because of costs, face medical debt, and miss out on regular preventive services or having a consistent healthcare provider.

A study by Deloitte (Source) shows that health inequities contribute to about 320 billion USD in annual healthcare spending. Without intervention, this could rise to over 1 trillion USD by 2040. Such an increase would worsen affordability, quality, and accessibility, compounding existing challenges in the system.

Building an Equitable Healthcare System

●       Expand access to healthcare services in underserved areas. This can include establishing community health centers, mobile healthcare units, and telemedicine initiatives to help those who face barriers related to distance, transportation, or limited availability of local facilities.  

●       All stakeholders in the healthcare ecosystem must prioritize health equity in their decision-making. 

●       Equity-centered thinking should guide business choices and policies.

●       Healthcare stakeholders must collaborate to solve complex health equity issues and build sustainable solutions.

5.    Cybersecurity

Healthcare industry stores vast amounts of sensitive data, including personally identifiable information (PII) and protected health information (PHI).

This makes it a prime target for cyberattacks, and a breach of sensitive patient data can have severe legal consequences.

Since 2020, there has been a 53% hike in data breaches. (Source) According to a report (Source), 386 healthcare cyber-attacks were reported till Oct 2024. Such attacks are not just data theft crimes; they are a risk to every function of a healthcare enterprise.

An estimate suggests that 80 percent of ransomware attacks on hospitals disrupt patient care, lasting weeks. 

The financial impact of cyberattacks is staggering. On average, mitigating a data breach in the healthcare industry costs more than 10 million USD. A single ransomware attack can lead to a loss of up to 30 percent of annual operating income.

These costs are unsustainable for hospitals and health systems operating on margins of less than 2 percent and still recovering from negative margins in 2022.

To mitigate the threat of data breaches, healthcare organizations should prioritize investing in advanced data encryption technologies and systems, including advanced firewalls and intrusion detection solutions.

Organizations should also provide controlled access to information to protect it from unauthorized access.

6.    Integration of Advanced Technologies.

Undoubtedly, advanced technologies like AI, Cloud, IoT, big data, and AR/VR make the medical practice efficient. Electronic Health Records (EHR), robotics in surgeries, chatbots to schedule appointments at hospitals, and telemedicine are some examples of higher-quality outcomes with advanced technologies.

Adopting these tech solutions into your existing infrastructure and getting the medical staff and patients to buy into them is easier said than done.

Implementing technology in healthcare poses cost challenges and interoperability issues. Due to the learning curve associated with its implementation, adopting new technology in healthcare may present initial challenges and resistance among physicians.

In addition, inputting patient information into EHRs can be time-consuming and susceptible to errors. Inaccuracies in data entry can affect the quality of care and patient safety.

Smart Emergency Response Solutions is an important use case, which can significantly enhance emergency care and potentially make a life-saving difference. It allows efficient data sharing among ambulances, physicians, first responders, and emergency departments, leading to real-time responses.

Features like video calls with doctors from inside ambulances, instant access to patient histories, and streamlined hospital admissions help improve emergency care. By the time patients arrive, doctors have access to vital signs and key medical data, allowing for faster, more informed medical interventions.

Another use case can be mobile healthcare.

7.    Policy and Regulatory Changes.

The regulatory landscape in the healthcare sector is evolving. Over time, many new healthcare regulations at the federal and state levels are introduced and amended. This poses a big challenge for healthcare providers, as they find the latest compliance requirements complex and time-consuming.

Adapting to new rules while adhering to existing ones strains healthcare providers' financial resources and administrative capacity.

Besides, policy and regulatory changes are often accompanied by financial unpredictability. This leads to reimbursement cuts, penalties, and other unforeseen costs. 

Compliance committees must be established to build strategies to address the difficulties associated with policy and regulatory changes.

These committees should also conduct regular audits of the health systems to ensure compliance with the new policies and regulations. 

8.    Need for Improved Mental Health Systems.

One of the most critical challenges in the healthcare industry is the growing need for improved mental healthcare.

There is a growing recognition of the mental health crisis. Mental illnesses include a wide range of conditions that can vary in severity from mild to moderate to severe.

Approximately 23.1% of U.S. adults, which is more than one in five, are living with a mental illness in 2022. (Source)

And 4% of the global population suffers from depression. (Source)

Mental health issues not only incur economic costs through lost productivity but also result in a reduced quality of life for individuals and their families, potentially leading to disability, unemployment, and social isolation.

Healthcare systems are struggling to cope with the rising demand for mental health services, facing obstacles such as long wait times for therapy, limited access to specialized care, and insufficient resources.

Moreover, the persistent stigma surrounding mental health problems hinders many individuals from seeking help openly, as fears of discrimination and societal judgment persist.

Integrating mental health services into primary care settings can help lower barriers to access by providing individuals with holistic care that addresses both their physical and mental health needs.

The use of telehealth and digital mental health platforms has grown significantly, improving accessibility to mental health services, particularly in remote or underserved areas, by offering therapy, counseling, and self-help resources online.

Efforts to enforce and broaden mental health parity laws by governments and health systems aim to ensure that mental health services receive the same coverage as physical health services in insurance plans, thereby reducing financial obstacles to care.

Conclusion

To sum it up, there are many challenges in healthcare today — ranging from rising costs and growing mental health concerns to data security issues and the complexities of an aging population.

As the industry continues to evolve, addressing these challenges proactively is essential to ensure high-quality healthcare delivery.

In tackling these hurdles, healthcare organizations must embrace innovative technologies. That’s where Imaginovation steps in.

With years of experience and expertise in the healthcare domain, we specialize in building solutions to streamline your healthcare processes.

Whether it’s deciding on the right technologies or developing applications to meet your specific needs, we’re here to guide you every step of the way. Let's talk.