Acceleration in Health Care, in Life Sciences, and at Work
The second year of the COVID-19 pandemic continued to increase the consumerization and digitization of the health care and life sciences industries. Fueling these trends is the marked uptick in transactions as well as regulatory changes on the horizon at the federal and state levels. Meanwhile, with a full return to in-office work remaining challenging, employers established hybrid and remote work models that have diversified the workforce and are likely here to stay.
“In addition to investors, the federal government is expected to ease the evolution to consumer-driven and virtual care.”
Consolidation Is Spurring Innovation and Digitization
As we entered 2021, the pharmaceutical industry had accomplished the unprecedented feat of developing and delivering the life-saving COVID-19 vaccine to the world in less than a year. Investor interest in COVID-19-related vaccine, drug, device, and testing products skyrocketed this year, with 400 transactions closing in the life sciences, medical device, and pharmaceutical sectors through the end of October, a 33 percent increase above 2020. Overall, transactions in health care and life sciences are expected to far outpace last year, with 3,000 deals anticipated to close by the end of the year. In comparison, there were only 1,936 health care transactions in all of 2020. Physician practices, cannabis, and health IT and software are the other hot areas leading consolidation in the industry. The consolidation in the market is expected to continue to increase the pace of innovation and shift to digitization in 2022.
Regulatory changes ahead
In addition to investors, the federal government is expected to ease the evolution to consumer-driven and virtual care. In October, the U.S. Department of Health and Human Services (HHS) renewed the public health emergency for the entire United States. Whether the regulatory flexibilities put in place through telehealth policy changes are here to stay depends largely on what actions Congress and federal agencies take after the public health emergency ends. However, the government has started to indicate how regulatory flexibilities could become permanent. For instance, HHS has been exercising its discretion to not enforce requirements for established practitioner-patient relationships prior to the provision of telehealth services. A 2021 study conducted by HHS found that 84 percent of beneficiaries received telehealth services only from providers with whom they had an established relationship. The government is planning to use data examples like this to confirm which policy changes should be kept in place to encourage and improve health care access through telehealth.
of workers across industries are still working remotely
The Remote Work Experiment Goes Hybrid
Last year, employers were forced to shift millions of employees to remote work overnight. However, what started as an experiment to keep our communities and loved ones healthy and safe became businesses’ codified hybrid and remote work models in 2021. A September Gallup survey found that 45 percent of workers across all industry sectors in the United States are still working remotely at least some of the time, and that number jumps to 67 percent when looking at the white-collar workforce. These numbers can, in part, be attributed to the slower-than-anticipated vaccine rate and new COVID-19 variants, which caused fresh rounds of restrictions and compliance hurdles that delayed many employers’ return-to-office plans. But one thing is for certain, employees are looking for more flexibility and wellness benefits that can better support the thriving and diverse workforce of the future. Hybrid, remote, and other creative models will meet these demands for years to come.
While the formal shift to contemporary work models is good news for employers and employees alike, we also saw regulatory and compliance burdens pop up at every turn in 2021. President Biden kicked off his first term with aggressive action to live up to his campaign promise to be the most pro-labor U.S. president in history. The transition in the White House also shifted government enforcement toward a strategy that emphasizes combatting retaliation and discrimination and incentivizes whistleblowers.
Continually changing and uncertain rules around COVID-19 remained the norm. As we close out the year, employers face unprecedented vaccination, testing, and workplace safety requirements from federal, state, and local jurisdictions. Although the pandemic will further evolve in 2022 hopefully for the better, employers are unlikely to see the regulatory, legal, and compliance challenges subside next year.
“Employers are unlikely to see the regulatory, legal, and compliance challenges subside next year."
of white-collar workers are working remotely