Health system executives used one word over and over again to describe their experience through the COVID-19 pandemic. It became a tired mantra quickly and some retired it from their vocabulary. But now it’s back, for good reason.
“Unprecedented.”
“We are truly in an unprecedented era of uncertainty,” Greg Damron, CFO of University of Missouri Health Care, told Becker’s recently. “Academic medical centers, being at the crossroads of clinical delivery, education and research are particularly exposed on a number of fronts to healthcare and fiscal policy changes, some of which are changing literally by the hour.”
Tariffs could bump the price of hospital supplies in the future and CFOs in particular are zeroing in on the exact costs of each component of critical supplies, and where those supplies are sourced, to project possible impacts over the next several years.
“The billion dollar question, quite literally, is how do we plan around all of this in order to maintain long term stability and to keep reinvesting to deliver on our promise of delivering high quality clinical care, creating the next generation healthcare workforce, and continuously pushing the boundaries of science and innovation?” said Mr. Damron. “There are so many scenarios that have to be considered and planned against that it would not be hard to get paralyzed and be reactive to change versus being able to chart a steady course through the turbulence.”
The potential for Medicaid cuts looms large for hospitals and health systems, and each iteration of the 2026 budget reveals new potential for change. Many C-suites are preparing for a future where fewer people are eligible for Medicaid and the uninsured population balloons, which will stress their already thin margins.
“Potential cuts to Medicaid and possibly Medicare, coupled with uncertainty surrounding the 340B program and NIH funding, create significant headwinds, requiring intense advocacy to ensure legislators understand their catastrophic impact on hospital stability,” said Micahel Antoniades, president of UChicago Medicine Ingalls Memorial. “Private insurers exacerbate the crisis by denying claims at unprecedented rates, choking cash flow as hospitals provide expensive care without reimbursement. Tariffs add another layer of complexity, potentially disrupting supply chains and driving up costs including medications further straining budgets.”
Workforce shortages and supply costs also affect hospital operations and capacity constraints. Health systems are creating new talent pipeline programs and benefits to retain existing teammates.
“Our health system’s workforce is evolving in response to unprecedented challenges, with a continued focus on supporting the experience and well-being of our faculty and staff,” Marschall Runge, MD, PhD, executive vice president of medical affairs at the University of Michigan and CEO of Michigan Medicine in Ann Arbor, told Becker’s. “We’ve increased the cadence of our meetings across all levels to strengthen communication, teamwork and shared purpose.”
Dr. Runge is also focused on wellness, civility and mutual respect across the diverse workforce with a variety of perspectives. This is especially important as nurses, physicians and other staff members advocate for change.
“The formation of new labor unions, strongly supported by our Regents, reflects the changing expectations of our workforce,” Dr. Runge. “As labor negotiations grow more complex amid fiscal pressures, particularly within university-based systems, we remain committed to constructive dialogue and partnerships.”
Craig Albanese, MD, CEO of Duke University Health System in Durham, N.C., also identified the uncertainty as a unique challenge for today’s leaders. He recognized that heading into this year, many health systems continued to lose money and confront service cuts, workforce reductions and more.
“Amid unprecedented volatility, resource constraints and technical disruption, how can healthcare executives rapidly adapt and transform their organizations to sustainably deliver high-value care, optimize operational efficiency and preserve workforce resilience and empathy?” he said, as his billion-dollar question.
Gina Hawley, DrPH, COO of University of Utah Health and Clinics in Salt Lake City, said healthcare leaders needed to balance extreme challenges coming from state and federal regulators, technology advancement, financial and capacity issues and more during “times of unprecedented changes.”
“At University of Utah Hospitals and Clinics and U Health, we’re continuing various efforts through our financial, operational and capacity plans, while also keeping a close, data-driven eye on external shifts and possible impacts to our patients, teams and communities,” she said.
Mr. Antoniades had a similar outlook for leadership through heading into the second half of the year.
“Executives must deploy strategic foresight, operational efficiency, robust recruitment initiatives and innovative retention strategies to safeguard financial health and ensure sustainable care delivery in this precarious landscape; and yet many hospitals will not be able to weather the storms,” he said.
