As hospitals and health systems map out their priorities for 2027, many CEOs have already determined the budget lines they are increasing — and decreasing — in the coming year.
The year ahead will build on existing challenges across the industry, including deepened Medicaid cuts and the Health Resources and Services Administration’s revised 340B rebate pilot set to go live Jan. 1. Premier projects hospitals will lose $68.6 billion in revenue during 2026-2027 as Medicaid enrollment shrinks, with work requirements and financing restrictions set to take full effect next year.
As healthcare organizations face financial strain, CEOs are sharpening where their dollars go to make it count the most — and pulling back where they can. Becker’s connected with five CEOs who outlined how they are making those decisions.
Summit Pacific Medical Center in Elma, Wash., plans to increase its investment in revenue cycle systems and is exploring new CBO partnerships going into 2027, CEO Josh Martin said.
“As HR 1 takes effect, Medicaid will lose enrollees, and insurance companies will fight harder to pay providers less going into 2027,” Mr. Martin said. “What determines whether a hospital is in the red or black next year all comes down to its payer strategy and revenue cycle optimization.”
Amid retention challenges hospitals are facing, several CEOs pointed to their workforce as a top investment they are increasing in 2027.
Marc Mertz, CEO of Visalia, Calif.-based Kaweah Health, sees people as the system’s most valuable asset. Investments include evaluating salaries and benefits to ensure the system attracts and retains top talent, while also investing heavily in education and staff development, Mr. Mertz said. One milestone is its nursing school program that launched three years ago and focused on existing employees.
“Today, as we graduate our first cohorts of bachelor-prepared nurses, we aren’t just filling vacancies, we are building a sustainable, homegrown pipeline of skilled and compassionate caregivers who are helping improve the health of our community,” he said.
Shane Sanborn, CEO of Shoshone Medical Center in Kellogg, Idaho, is also increasing workforce investment, which is particularly important as a rural hospital.
“We know that those we work with are our greatest asset, and in a rural community, that investment is directly tied to our ability to sustain and grow access to high-quality care,” Mr. Sanborn said.
The hospital’s priorities include career development, education and training, employee recognition, and initiatives to strengthen engagement and retention.
“Healthcare workforce challenges aren’t going away, particularly in rural communities,” Mr. Sanborn said. “Rather than viewing workforce investment simply as an expense, we see it as an investment in the long-term strength of our organization and the future of healthcare in the Silver Valley.”
Merry-Ann Keane, MSN, CEO of Ocean Beach Health in Ilwaco, Wash., is also doubling down on workforce. As a rural public hospital, she said, the organization faces challenges often beyond its control.
“What we can control is how we invest in our workforce, our culture and the communities we serve,” Ms. Keane said. “Over the past two years, those investments have paid off. We’ve successfully recruited new primary care providers, nurses, and other staff while also developing talent from within our organization.”
In 2027, Ocean Beach Health plans to continue strengthening leadership pathways, expanding districtwide education and training and advancing workplace safety initiatives — investments that help the organization build resilience and ensure patients receive compassionate care close to home, Ms. Keane said.
“We will also continue listening closely to our community and growing services that meet local health needs,” she said. “By investing inwardly in our people and outwardly in the health of our region, we are strengthening our organization and helping ensure residents and visitors alike can rely on local healthcare for years to come.”
Weiser (Idaho) Memorial Hospital & Clinics is investing more in community outreach and public relations. One of the main reasons is that the critical access hospital is about an hour away from two major systems, CEO Beau McNeff said. The hospital has the tools and resources to offer services that the bigger systems also do, like orthopedic and general surgery, colonoscopies and podiatry, he said.
“The difference is we’re not near as difficult to navigate. People just don’t know that we’re here or what all we can do,” Mr. McNeff said. “The patients that find us, love us, but we need more folks to find us.”
Where CEOs are pulling back
Many organizations are also pulling back investments in other areas to spend dollars more efficiently toward their goals.
One example is consultants, the need for which Weiser Memorial has seen decrease over the past year. It is a trend Mr. McNeff expects to continue.
“That’s not to say we don’t have any; there are always areas we need outside expertise,” he said. “We’re working hard to build the bench where it makes sense, so we need less consultants in the future.”
Not every leader is pulling back spending outright. Summit Pacific is redirecting, for example. Rather than cutting, Mr. Martin said, the system is redeploying its population health resources, a department that has successfully reduced cost of care over the last five years and created essential access to health services for Medicaid members.
“As many of these members may lose enrollment in 2027 with HR 1, we are redeploying our population health department to assist patients with insurance navigation and Medicaid eligibility so we can reduce the number of patients that end up in our emergency department on charity care at a higher cost,” he said.
While investing in its people remains a top priority, Ocean Beach Health is reducing investment in temporary staffing. As recruitment and retention efforts have strengthened the permanent workforce, Ms. Keane expects to further reduce its reliance on locum providers and contract nurses.
“Investing in stable, long-term teams improves continuity of care, strengthens organizational culture, and is a more sustainable approach for our hospital and community,” she said. “Building and retaining a dedicated local workforce is one of the most important investments we can make in the long-term health and sustainability of both our organization and the community we serve.”
