For many hospitals, especially those where Medicare and Medicaid make up the majority of the payer mix, HR 1’s scheduled cuts have not prompted hospitals to seek new fiscal metrics — but the cuts have imbued the metrics that have always mattered with a new sense of urgency.
Days cash on hand, payer denial rates and agency labor spend have been staples of hospital financial monitoring for years. What has changed heading into 2027 is the posture around those metrics and the conversations they generate. Two CEOs describe a shared shift: lower tolerance for variance, faster escalation and a closer working relationship with their CFOs than they maintained two years ago.
Michael Backus, president and CEO of Oswego (N.Y.) Health, frames the change plainly. “Sole community hospitals have been watching days cash on hand, denial rates, agency spend, and many other financial metrics for decades because payers, especially Medicare and Medicaid, have lagged so far behind actual costs,” Mr. Backus told Becker’s. “That’s not new and it’s becoming more challenging with the cuts coming from HR1 in 2027. Two years ago our risk tolerance may have been slightly higher because we didn’t have those cuts in front of us. Now, we’re more conservative to ensure continuity of operations as we work to mitigate federal action.”
That conservatism has a structural dimension at Oswego Health. Mr. Backus and CFO Eric Campbell, who also serves as executive vice president of finance, work in adjacent offices — a proximity that shapes how quickly concerns surface before they appear in reports.
“His office door is next to mine, so when either of us feel something moving in the wrong direction, often we’ve had a doorway conversation before it shows up in the numbers,” Mr. Backus said. “When we start to see it as we close a week or month, then it’s a direct conversation between us and probably our COO.”
From there, escalation moves to a wider group.
“After that, we built monthly cadence where we talk through contract labor, for example, with department directors and perhaps we change course within that meeting to control spend,” Mr. Backus said. “Again, these decisions are able to be implemented because they involve not just the CEO/CFO/COO, but also departmental leaders who are closest to the patients and staff.”
Agency spend is the specific lever Oswego Health has been targeting. The organization has aimed for zero agency spend for roughly a year and has not completely closed the gap.
“Most of the agency staff that we have are in specific, revenue neutral or generating space, so their engagement to us is a bit different than pure cost,” he said. “Obviously, seeing those positions become full-time staff would help other metrics move more quickly in what we expect to be challenging years ahead with cuts to Medicare and Medicaid.”
At Dimmit Regional Hospital in Carrizo Springs, Texas, CEO Andres Duran points to days cash on hand as the number he and his CFO are watching most closely heading into 2027. The metric, in his view, functions as the clearest measure of a hospital’s operating buffer — how long it can sustain operations if revenues slow or are disrupted.
Mr. Duran describes a graduated response rather than a fixed alarm. When a hospital runs roughly 30 days below its target, he told Becker’s, the review begins with reducing unnecessary costs. At half the goal, the situation has passed the point of simple adjustment.
“If you go down to maybe half of that, for example, then you’re probably past the point of having that conversation and having to start making some questions regarding minimizing exposure,” he said. “It just depends where you are, which is why it’s more important to look at that number at least every two weeks.”
The frequency matters in both directions, Mr. Duran said — it catches problems early and creates space to understand what’s working when cash position is strong.
“At one week you’re micromanaging that number, but if you look at it every two weeks or once a month, you’re saying, ‘Where do our opportunities lie? Where are our challenges?'” he said. “Let’s flip that script and say, ‘We’re at 200. What went well? How do we continue that trend? And what do we do with these extra days that we have on hand? Do we invest it back in the staff and capital?'”
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