Key Challenges in Healthcare

  • 5 minutes

Healthcare is facing significant change. It’s imperative that the industry adapts and responds to this changing landscape.

In recent years, healthcare organizations are burdened with an unprecedented volume of challenging moments that forced many to rethink established norms and operational best practices.

Examples of pressures that the industry faces include:

  • Higher patient expectations

  • Workforce burnout

  • Increasing data volume

  • Constant pressure for innovation

Diagram of healthcare challenges.

More specifically, healthcare organizations face these challenges:

  • Expectations are higher than ever for patient and member engagement - As technology becomes more ubiquitous, many patients and members want new opportunities for managing their health. Today, 70% of patients and members prefer digital solutions for all major aspects of their care journey.

  • Health workforce burnout and talent shortages - Burnout is reached crisis levels. Moreover, burnout with health workers has harmful consequences for patient care and safety. The consequences include decreased time spent between providers and patients, increased medical errors, and a shortage of workers as a result of clinicians leaving the profession. Surveys show that between 35-54% of clinicians are suffering burnout. Researchers project a shortage of 10 million frontline healthcare workers worldwide by 2030. Additionally, researchers estimate that annual burnout-related turnover costs are 9 billion dollars for nurses and 2.6 to 6.3 billion dollars for physicians. These estimates don't include turnover among other types of health workers across the continuum of care.

  • Effective use and interpretation of data insights - The problem isn’t a lack of data, it’s a lack of interoperability and integration across data systems. Today, hospitals produce over 50 petabytes of data across upward of 10 siloed systems every year. With such large volumes of unstructured data, providers must spend an exorbitant amount of time trying to glean insights from that data. In fact, up to 97% of data goes unused. This unused data stands as a major barrier to improving operational efficiency, ensuring high quality standards, and reducing costs.

  • Security pressures - Security and patient privacy risks are rising. For the fourteenth year in a row, healthcare had the highest average data breach cost of any industry. In 2024, healthcare data breaches came with a hefty price tag, to the tune of 9.77 million dollars. This fiscal year, 389 US healthcare institutions were hit by ransomware. This ransomware caused network shutdowns, offline systems, delays in critical medical procedures, and rescheduled appointments. The attacks are costly, with one industry report showing healthcare organizations losing up to 900,000 dollars each day on downtime alone.

  • Financial integrity - The COVID-19 pandemic created a sharp and immediate reduction in elective and nonessential surgeries, a major revenue driver for many hospitals, forcing administrators to reconsider healthcare economics for the long term. Estimated hospital losses are at 54 billion dollars, with a 26.7% operating margin decline year-over-year. Immense pressure is placed on health organizations to find more efficient ways of working to bring the system-wide costs down.

Addressing these pressures while lowering costs is a societal issue, and it's important for Microsoft to contribute and address these issues.

For more information, see the following resources: