Citi Commercial Bank 2024 Global Industry Insights Report

It remains a complex world right now for those in healthcare, but industry leaders, on the whole, are starting to feel more positive. That may be because the outlook is improving or a result of having adapted to tougher circumstances. Either way, it’s an industry looking to reinvest excess cash and focus on how to spendmore of it should they find capital fromnew investors or freshmarkets for expansion. While health tech and life sciences are attracting investment at a fast clip, the outlook for the broader industry is more mixed. Healthcare companies remain concerned about the broader macroeconomic environment and feel unable to control their immediate direction. EASING HYPERTENSION Healthcare businesses are less worried about the bottom line than they were a year ago. This year, 59% of healthcare respondents said Cautious optimism as urgent care transitions to outpatient status that keeping costs down was their biggest challenge, a decrease from 72% of respondents last year. Similarly, worries about supply chains fell by around a third from last year and 59% expressed satisfaction with progress towards financial goals, up 9% from last year. However, uncertainty around inflation and geopolitical pressures, such as the threat of increased trade tariffs may lead Healthcare businesses tomake financing, production and strategic decisions that may drawmoney away from other operations. FOCUS ON REINJECTING CAPITAL RATHER THAN EXPANSION 52% of those surveyed said they expect to expand internationally —an increase from39% last year — but the industry is proceeding with caution. Of the industries surveyed, only Nonprofit respondents showed less interest in international expansion. Anecdotal evidence suggests safeguarding current business and expanding within existing markets as top of mind for Healthcare respondents. HEALTHCAREWANTS CASH STEROIDS The industry focus on capital is evident in how respondents view their banking arrangements. There was the same desire to improve access to working capital evident in other industries, but just under a third of Healthcare business leaders say they want to boost growth by sourcing more robust external financing. While the industry appears to still be focused on reinvesting cash, there are signs that respondents have an eye on an expansionary future— around 38%want to find simpler andmore scalable ways to enter newmarkets. TECH UPTAKE INHIBITED Healthcare has yet to adopt AI ‘enmasse’. Three in five of those surveyed said they don’t currently utilize AI and don’t plan to. Anecdotally, explanations revolved around a lack of understanding, funds or current need. However, as a sign of things to come, some companies do leverage technology and data to connect with customers and optimize internal processes. Several discussed automation and outsourcing software, while one company that works with AI said it was using massive proprietary datasets in its operations. HEALTHCARE “The threat or promise of increased tariffs will necessitate financing, production, sales and strategic decisions which could divert funding as well as resourcing from day- to-day operations and business-as-usual planning.” Nauman Ansari. “We have created an ecosystem where people work simultaneously on the same database without creating redundancy and also are in process of implementing ERP Solution.” India-based company with annual sales turnover of between $10million and $24million. Nauman Ansari Global Head of Healthcare, Citi Commercial Bank