Financial uncertainty, regulatory shifts, workforce shortages, and rising supply costs are placing unprecedented pressure on healthcare leaders. As federal and state policies evolve, executives are not just running hospitals — they’re fighting for their survival. In this high-stakes environment, even the strongest organizations are questioning how to stay afloat.
“Hospital executives face a number of billion-dollar headwinds: how to navigate a relentless convergence of financial, regulatory and workforce challenges that threaten the healthcare industry’s survival,” said Michael Antoniades, president of UChicago Medicine Ingalls Memorial. “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.”
Hospital and health system CEOs and CFOs are spending an increasing amount of time advocating for the industry with state and federal policymakers. They are competing against health insurance industry and pharmaceutical executives for precious time with legislators who could influence not only healthcare policy, but economic policies directly impacting hospitals.
The message many send to legislators is clear: hospitals need help.
“Private insurers exacerbate the crisis by denying claims at unprecedented rates, choking cash flow as hospitals provide expensive care without reimbursement,” said Mr. Antoniades. “Tariffs add another layer of complexity, potentially disrupting supply chains and driving up costs including medications, further straining budgets.”
Jose Acevedo, MD, is keeping a close eye on executive orders, noting the big question for him is: “How will we be impacted by all the executive orders being issued by the federal government?”
“At UR Medicine Finger Lakes Health, we provide healthcare to rural communities. Many proposed changes could affect the financial viability of community hospitals in rural areas, including site neutrality, challenges to the 340B program, reduced Medicare and Medicaid reimbursement, challenges to J-1 visas, and FEMA reimbursement, to name a few,” said Dr. Acevedo. “In our region, it is crucial that we continue to provide quality healthcare that is locally available to our community members, eliminating their need to travel to larger cities for care.”
Ashwani Bhatia, MD, CEO and CMO of BayCare Clinic in Green Bay, Wis., also sees the global trade tensions as a major headwind for rural and community healthcare.
“With shifting U.S.-China relations and possible new tariffs on medical supplies, pharmaceuticals and tech components, healthcare systems face rising input costs. Do we localize supply chain for control and predictability or continue relying on global suppliers,” Dr. Bhatia said. “The new administration could bring changes to drug pricing reform, Medicare reimbursement, value-based care models. How do we remain nimble amid regulatory shifts while planning three to five years out?”
Academic health systems are also precarious position. Systems like Northwestern Medicine in Chicago and Weill Cornell Medicine in New York City reported the federal government withdrew millions of dollars in research funding, which impacts the organization’s ability to carry out their academic mission and recruit physicians on the cutting edge of medicine. They’re also taking on more responsibility for surrounding community hospitals – making strategic technology and talent investments or acquiring them outright – to keep the facilities from closing.
“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,” said Greg Damron, CFO of University of Missouri Health Care in Columbia. “Whether it is the potential for cuts to Medicare and Medicaid programs, effects of funding changes on clinical research and medical schools, or trade and tariff policies, 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 work force, and continuously pushing the boundaries of science and innovation?”
Marschall Runge, MD, PhD, executive vice president of medical affairs at University of Michigan and CEO of Michigan Medicine in Ann Arbor, is also feeling the pinch of an uncertain economic environment.
“Leaders must navigate an increasingly volatile financial landscape marked by real and potential disruptions: uncertainty around Medicare and Medicaid funding, mountain threats to 340B program revenue, and broader regulatory unpredictability tied to both federal policy shifts and election-year dynamics,” he said. “Add to that rising labor costs, payer negotiations that erode margins, and capital market constraints that limit investment in innovation. The challenges demand not just operational efficiency but also strategic agility and willingness to lead through ambiguity.”
Workforce issues and inflation compound hospitals’ financial challenges. Some have closed services or beds because they weren’t able to staff them. Others are having trouble recruiting and retaining physicians and clinical professionals after the stress of the pandemic.
“Workforce shortages, fueled by burnout, retirements and competitive markets, inflate labor costs and hinder care delivery, threatening quality and access,” said Mr. Antoniades. “Each issue, whether funding reductions, claim denials, supply chain disruptions, or staffing crisis, carries the potential to force vulnerable hospitals into deep financial issues that many will not be able to recover from.”
How are executives dealing with the pressure?
“There are so many scenarios that have been 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,” said Mr. Damron.
Leadership teams are struggling to meet short-term needs while planning for the future. Many organizations are pausing growth initiatives until they see more stability. But regardless of the economic and political climate, some things won’t change.
“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,” said Mr. Antoniades.
