As hospitals adapt to an increasingly outpatient-focused care model, leaders must balance cost containment with strategic investments in artificial intelligence, automation and value-based care. Meanwhile, industry disruptors — ranging from private equity firms to new players — are reshaping competition and reimbursement structures.
In this challenging and competitive environment, CFOs are not just financial stewards but key architects of their health systems’ long-term sustainability. Here’s a look at the biggest trends shaping health system finances in 2025.
Editor’s note: Responses are lightly edited for length and clarity. CFOs and revenue cycle leaders who wish to be featured on the Becker’s CFO + Revenue Cycle Podcast, please email Alan Condon at acondon@beckershealthcare.com.
1. Outpatient growth: Health systems are significantly increasing investments in ambulatory care, shifting resources away from traditional inpatient settings toward outpatient facilities such as ambulatory surgery centers, imaging centers, infusion centers, etc. CFOs are focused on aligning cost structures with the revenue base of these facilities while ensuring they are managed differently than hospitals to maximize efficiency and profitability.
“One of the most significant trends is the shift of care and resources into the ambulatory setting. While this shift has been going on for a long time, what’s notable now is the substantial allocation of capital and assets in this space,” Daniel Isacksen Jr., executive vice president and CFO of Livonia, Mich.-based Trinity Health, told Becker’s. “We’re seeing major investments in comprehensive ambulatory centers, medical group facilities, ambulatory surgery centers, retail imaging, infusion centers These changes are significantly influencing capital investment strategies and will continue to do so. The key to success in this area is developing expertise and aligning cost structures with the segment’s revenue base. Ambulatory care facilities aren’t hospitals; they need to be managed, operated and supported differently.”
2. Industry consolidation: Nontraditional players, including private equity firms and corporate entities, continue to disrupt healthcare by acquiring physician groups, specialty clinics and ambulatory surgery centers. While these acquisitions present competition, some physician groups are beginning to express dissatisfaction with private equity partnerships, potentially shifting market dynamics. CFOs are monitoring these trends to understand how they may affect hospital revenue and service line growth.
“Consolidation is accelerating across the industry,” Clay Ashdown, CFO of Salt Lake City-based Intermountain Health, told Becker’s. “This includes providers coming together, increased vertical integration where different entities join forces to complement one another’s services, and the entry of new players — whether private equity, non-traditional entities, or large corporations moving into healthcare. It’s a very dynamic period, probably the most pronounced I’ve seen in my career. Healthcare has never been a dull industry, but the current level of change is more significant than at any point I’ve experienced.”
3. Artificial intelligence and automation: AI and automation are playing a growing role in healthcare operations, particularly in revenue cycle management, clinical documentation, and staffing solutions. Technologies like ambient listening for physician documentation, virtual nursing to address staffing shortages, and machine learning for supply chain optimization are being actively implemented. CFOs are tasked with distinguishing between hype and practical applications that drive efficiency and financial stability.
“Another trend that’s impossible to ignore is the proliferation of automation. I think we’re just scratching the surface in healthcare — and across all industries — when it comes to the implications of these technologies,” Mr. Ashdown said. “We’re already seeing some early applications in the revenue cycle space, but I believe AI will have much broader uses. The challenge will be deciphering what is meaningful versus what is just noise.”
4. Regulatory and policy changes: Shifting regulatory landscapes, including potential changes to the 340B drug pricing program, site neutrality policies, and Medicaid supplemental funding, are prompting CFOs to closely monitor federal and state policies. The potential expiration of exchange plan subsidies in 2026 could lead to a surge in the uninsured population, adding financial strain on hospitals. CFOs are also assessing how changes in government healthcare programs will impact long-term revenue streams.
“We’re closely monitoring the ongoing pressure from big pharma on the 340B program. This program is a significant revenue stream for us, helping offset the costs of providing care to underinsured patients in our markets,” Mr. Gleason told Becker’s. “We’re also concerned about site neutrality threats, which remain a major issue. Additionally, with the change in administrations, there’s renewed focus on the subsidies for exchange products, set to expire in 2026 unless renewed. The potential impact is significant — recent projections show that in Louisiana, up to 32% of those insured through the exchange could lose coverage, while in Mississippi, it could be as high as 43%. If those individuals move into the uninsured population, the financial impact on health systems would be substantial.”
5. Medicare Advantage and increasing denials: The growing influence of Medicare Advantage is creating financial challenges for hospitals, particularly due to high denial rates and complex pre-authorization requirements. CFOs are focused on improving engagement with payers to streamline claim approvals, minimize reimbursement delays, and reduce administrative costs associated with claim resubmissions. Ensuring accurate documentation and negotiating favorable contract terms with insurers are critical priorities.
“While many believe Medicare Advantage ultimately lowers costs, the fact is that it poses serious challenges to hospitals. Prior authorization denial rates are unquestionably high, which causes providers to absorb additional costs to refile a claim and adds uncertainty around how much we will be paid or, for that matter, if we’re paid at all,” Steve Aleman, CFO of Ontario, Calif.-based Prime Healthcare, told Becker’s. “These denials increase costs, create uncertainty around reimbursement and add complexity to defining expected net reimbursement. We must engage actively with plans, ensuring state-of-the-art information and processes to close the gap between care costs and reimbursement.”
6. Supply chain optimization. Strengthening the supply chain has become a top priority for health system CFOs as they navigate ongoing disruptions, cost pressures and the need for greater resilience in their operations. The lessons learned during the COVID-19 pandemic — when hospitals struggled to secure essential medical supplies — have underscored the importance of having a more agile, diversified, and cost-effective supply chain.
“During COVID, my team and I worked hard to secure the supplies needed to support our caregivers, and while we were successful, the risk of disruption is always there,Matthew Arsenault, CFO of Coral Gables, Fla.-based Baptist Health South Florida, said on the Becker’s CFO and Revenue Cycle Podcast. “The landscape continues to evolve, with more efforts toward onshoring and supply chain diversification to ensure we maintain access to critical resources.”
7. Labor costs and workforce stability: Rising labor costs and workforce shortages remain top concerns, particularly in clinical roles such as nursing, surgical technicians, and anesthesia providers. Health systems are actively reducing reliance on expensive agency staffing and investing in workforce development programs in collaboration with educational institutions. Some CFOs are also monitoring increased union activity, which adds another layer of complexity to labor negotiations and staffing strategies.
“We’re seeing challenges in hiring techs, administrators, operators and physician leaders. Across the board, there simply isn’t enough talent to fill all the roles we need. Our focus is on attracting and retaining the best talent possible,” Mr. Gleason said. “In addition, we’re seeing an uptick in union activity. I’ve worked in unionized environments before, and they certainly come with challenges. As we continue rebounding from the pandemic, dealing with labor unions is another layer of complexity we’d prefer to avoid right now. So, we’re keeping a close eye on labor trends and workforce dynamics.”
8. Value-based care and risk-based contracting: The transition from fee-for-service to value-based care continues to gain momentum, with health systems increasingly entering into risk-based contracts with payers. These agreements, such as full-risk arrangements with Medicare Advantage and commercial plans, require providers to balance quality metrics, patient outcomes, and financial performance. CFOs are focused on ensuring these models provide sustainable financial rewards while improving patient care.
“As part of Highmark Health, we have a close relationship with Highmark Inc., our health plan partner. Recently, we entered into a full-risk arrangement with Highmark — our first iteration of managing a population based on quality metrics and loss ratios,” Brian Devine, CFO of Pittsburgh-based Allegheny Health Network, said. “In this model, we share both in the upside and downside of value-based care. Our goal is to ensure that we’re financially rewarded for our investments in quality, access and population health management while also collaborating closely with the health plan side to manage patient populations effectively. Beyond Highmark, we are working to expand these quality and care models with other payers, moving further away from fee-for-service. We believe this shift will drive better outcomes for both our patients and health plan members, making it a key focus in our long-term strategy.”
9. Inflationary pressures: Rising costs for labor, medical supplies, and pharmaceuticals continue to squeeze hospital margins, requiring CFOs to adopt aggressive cost-containment strategies. While inflation has moderated, reimbursement rates have not kept pace with rising expenses, creating ongoing financial challenges. Health systems are working to optimize supply chain efficiencies, negotiate better vendor contracts, and implement technology-driven solutions to reduce operational costs.
“Reimbursement is a major focus. With changes in the political landscape, we’re closely evaluating shifts in Medicare Advantage versus traditional Medicare, as well as continued growth in Medicare managed care,” Terry Metzger, CFO, of Toledo, Ohio-based ProMedica, said. “On the commercial side, we are monitoring reimbursement trends relative to inflation. While inflation has come down significantly, there’s still a lag in reimbursement from payers, and we’re working to optimize this as we move forward.”
10. Litigation and malpractice risks: Some health systems are experiencing an increase in high-severity malpractice settlements, particularly in regions where out-of-state attorneys are filing cases with higher financial demands. While case volume has not necessarily increased, the growing severity of settlements is creating financial risk for hospitals. CFOs are closely tracking these litigation trends and assessing their potential impact on liability costs and surance premiums.
“This trend has been observed nationally in larger metro areas, where massive plaintiff demands and settlements are more common in malpractice cases. However, we’re now seeing out-of-state lawyers filing substantial demands in our region, which has raised concerns about malpractice litigation and its financial impact on providers,” Mr. Devine said. “While we can’t always control the elevated demands from plaintiffs or how cases are litigated, we can focus on proper documentation, education, and communication within our clinical teams. Ensuring that escalation is handled correctly and documentation is thorough can strengthen our defense and lead to more reasonable settlements as cases progress.”
