As many hospitals and health systems face margin pressure from rising expenses, growing bad debt and shifting payer mix, some have made operational decisions that keep them on solid financial footing, from squeezing more capacity out of operating rooms and imaging to holding department leaders accountable for monthly budget variances.
“For University Health, staying in the black has really come down to growing business without the associated expenses growing more,” said Ed Banos, president and CEO of the San Antonio-based system.
About 43% of U.S. hospitals are operating at a loss, up from about 33% before the COVID-19 pandemic, according to Kaufman Hall’s August 2026 “National Hospital Flash Report.” Kaufman Hall pointed to three converging forces: rising expenses, growing bad debt and charity care, and payer mix erosion.
University Health, Lincoln, Neb.-based Bryan Health and Rapid City, S.D.-based Monument Health have credit ratings of AA+, AA- and AA-, respectively, according to Fitch. Their CEOs shared the operational decisions and financial strategies they credit with helping maintain that stability.
University Health
Mr. Banos, who became CEO in 2024 after serving as COO, said the system’s biggest financial decision came five or six years ago, when University Health set out to optimize hospital operations. The system already had strong volume and physicians who wanted to do more there, so the focus turned to fitting more cases into the operating room without adding much staffing expense.
As part of that effort, University Health’s operating room vice president set a goal to eliminate $20 million in operating room costs by consolidating implant costs and reviewing supplies and equipment, Mr. Banos said. The system has since expanded its efficiency efforts to patient flow, using an operational command center to reduce length of stay and inpatient costs per case while freeing beds for patients transferred from outside facilities.
Staffing has been another area of savings, particularly through the elimination of contract labor. After the pandemic, University Health was spending $30 million to $40 million a year on contract labor, Mr. Banos said, but the system has since eliminated that expense by hiring nurses, radiologic technologists and other employees.
The push to improve productivity has also extended to imaging and nursing, where the system has focused on increasing patient throughput and reducing labor costs. CT scanners that once handled three or four scans an hour now handle five, he said, and new Philips and AI software allows two MRIs an hour. In nursing, the system hired a productivity analyst, shifted more patient sitting to cameras and cut overtime in some departments from 4% or 5% to 2%.
“These are the soft dollars that add up when we’re very busy,” Mr. Banos said. “While they’re not very big individually, in an organization that might have 30 nursing units, they can add up quickly.”
For other hospital leaders, Mr. Banos emphasized the importance of understanding operational data and examining whether staffing requests reflect a genuine need or an opportunity to improve existing processes.
“When a nursing unit says it needs an extra nurse, or a unit says it needs extra staff, I think it’s very important for leaders to look at it and ask: Is this really needed, or could we operationally lean this and get the same results without adding a person, or even be more efficient?” he said.
He also stressed the importance of preparing for future financial pressures well before they take effect, including the Medicaid cuts expected under HR 1. At University Health, that means asking department leaders to consider how the organization would absorb a potential $100 million reduction.
“If you’re not planning a year or two ahead, if not longer, you’re not planning, because we know cuts are coming,” he said.
Bryan Health
At Bryan Health, financial management centers on keeping expense growth in line with revenue growth, using expense per adjusted patient day as a key measure, President and CEO Russ Gronewold said.
At Bryan Health, financial management centers on keeping expense growth in line with revenue growth, using expense per adjusted patient day as a key measure, President and CEO Russ Gronewold said. He added that the system’s goal is to keep expense per adjusted patient day in line with any growth in revenue per adjusted patient day.
To support that goal, the system keeps a flatter management structure to hold down overhead and keep more resources at the bedside, he said. The system has also invested in recruiting, base salaries and career pathing to reduce its reliance on premium traveler staffing, and in people, processes and technology to make sure payers meet their contractual obligations to reimburse it. At the same time, Bryan is working to improve processes that support quality while increasing emergency department and operating room throughput and expanding bed capacity.
Mr. Gronewold attributed the system’s approach to management discipline, though he acknowledged that maintaining financial performance is “getting tougher by the day.”
Monument Health
Paulette Davidson, president and CEO of Monument Health, said the system’s year-over-year revenue growth is fueled by a culture of alignment with its physicians and caregivers. By pacing its growth and communicating improvement strategies across the organization, Monument aims to manage expenses and improve efficiency while keeping leaders engaged in the work.
“It’s the daily work of each of our leaders reviewing data to ensure we are achieving our goals,” Ms. Davidson told Becker’s.
That accountability includes monthly meetings in which department leaders review budget variances with Ms. Davidson and other senior executives, giving leadership an opportunity to understand the causes of those differences and address obstacles.
“We have a better understanding and appreciation for budget variances and can quickly assist with any barriers they need help with,” she said.
Alongside those reviews, Monument typically has 10 to 15 margin improvement initiatives underway across the system, with a transformation office providing detailed progress reports to help leaders monitor performance and manage the pace of the work.
Becker’s 3rd Annual Fall Chief Pharmacy Officer Summit is the top tier event that the people leading the future of pharmacy convene. This 3-day event is built specifically for Chief Pharmacy Officers and senior pharmacy leaders. The sessions examine the workforce, financial and clinical priorities shaping pharmacy today. Becker’s is where candid discussions flourish and new ideas thrive. Becker's 3rd Annual Fall Chief Pharmacy Officer Summit
