According to a recent report, high labor costs, changes in insurance coverage, and the persistence of the COVID-19 pandemic will hit the healthcare industry financially hard in 2022, although some segments will be affected more than others bigger.

While changes in patient insurance eligibility create difficulties for health plans and hospital systems, the aging population will continue to increase inpatient senior housing facilities, according to a quarterly report from Moody’s Investors Service. The pandemic will also drive mergers among medtech operators in 2022, although deal values ??will fall from previous years, credit rating agencies said.

Here are five things that analyst Moody’s expects to see in the coming year:

1. Medicaid re-rules that ACA competition is bad for insurers. Molina Healthcare and other Medicaid-focused payers may see revenue drop if Congress ends public health emergency, which suspends program eligibility requirements. Moody’s noted that the insurer’s goal is to move the 4 million people destined to drop out of Medicaid into Affordable Care Act coverage. Analysts expect ACA registrations to remain high in 2022, but note that the exchange’s profitability will remain below pre-pandemic levels due to COVID costs and increased competition. Conditions related to “prolonged COVID” will cost insurers $22 billion this year, the report said.

2. Changes in coverage disrupt health system finances. Medicaid redefinition and Medicare growth will lead to lower reimbursement to the health system, which will make providers more reliant on government funding, the report said. Additionally, a shift to lower-cost sites of care and increased use of telehealth will reduce revenue. Analysts do not expect emergency department numbers to return to pre-pandemic levels.Across the industry, Moody’s expects providers’ patient mix to reflect Bon Secours Mercy Health Cincinnati’s most recent quarter saw slightly fewer hospital admissions than in 2019, but outpatient numbers surpassed pre-COVID levels. Staffing shortages will also limit the ability of the health system to admit new patients and reduce its profits.

3. Retirement housing returns to pre-pandemic levels by 2023. Moody’s expects occupancy at senior housing facilities to increase by 6% in 2022 as the number and severity of COVID-19 cases and new treatments decline. Labor cost It will also decline as competition increases among workers who are no longer eligible for supplemental unemployment benefits.

4. No major medical device deals, but a lot of mergers and acquisitions. Moody’s expects the number of large medical device deals to decline from 2021, when acquisitions worth more than $5 billion hit a record 99, According to PricewaterhouseCoopers. The consultancy expects smaller discount deals to dominate the market.

5. The No Surprise Act would limit the cash flow of physician staffing companies. The federal ban on unexpected medical bills would hit hard on the earnings of emergency room staffing, air ambulances and anesthesiology and radiology providers, the report said.Emergency room staffing companies such as team health will be the most affected as they are still outside the network of most commercial insurers. Air ambulance carriers will also be vulnerable, although in-network contracts now account for more than 50% of their patient portfolio.