The pressure on healthcare is not new. However, the industry’s ability to manage it requires leaders to rethink old strategies. This week offered three signals that the usual headwinds are evolving as payers face new threats, hospitals run out of cost-cutting options and the physician labor market begins to split.
1. Payer opposition stacks up.
Mark Cuban is extending his push into healthcare with Cost Plus Wellness, a direct contracting platform connecting self-insured employers and providers through publicly posted contracts. Like Cost Plus Drugs, the model emphasizes transparency — but here, it goes further by removing traditional payer functions altogether: no intermediaries, no prior authorization requirements and no hidden administrative fees.
At the same time, a third player has joined the AI arms race between payers and health systems. Becker’s has reported on a growing cohort of AI startups using large language models to fight insurance denials on behalf of patients. One such company, Claimable, is trained on insurance law, medical literature and legal precedents to generate and file appeal letters on behalf of patients. Early traction is notable — about 75% of users have seen denials overturned — and the company is already expanding beyond direct-to-consumer into partnerships with drugmakers and health systems.
Meanwhile, payers are continuing to scale their own AI investments. Most recently, UnitedHealth Group is committing $1.5 billion to AI in 2026 with a projected 2-to-1 return, much of it within 12 to 18 months. A significant focus is operational efficiency, including prior authorization, where the company aims to reduce total volume by at least 30% by the end of the year.
Payers are getting squeezed from two directions. Mr. Cuban’s model challenges the structure of the payer role by attempting to route around it entirely for employer-provider relationships. At the same time, AI startups are targeting operations, making it faster and easier to contest denials — and potentially more costly to uphold them.
Neither development is existential on its own. Together, they point to a shift: Capital, product and distribution are aligning against specific payer behaviors rather than remaining at the level of criticism. The payer business model remains intact, but discrete value-capture points within it — network gatekeeping, utilization management and denial economics — are drawing more competitive pressure.
2. There’s nothing left to cut. So what’s the move?
Two California health system CEOs recently described the same industry headwinds that have left hospitals with few ways left to cut costs — a reality not confined to one state, but playing out nationwide. The question now: What comes next?
Chris Van Gorder, president and CEO of San Diego-based Scripps Health, wrote April 20 that the system expects more than $100 million in annual revenue reductions tied to HR 1, with additional policy changes potentially deepening the hit. His core message: Hospitals have exhausted traditional efficiency plays, such as streamlining operations and reducing overhead, leaving “no excess left to trim” without affecting patient care. The downstream impact is real: pressure on services, access and workforce, particularly for safety-net providers.
Warner Thomas, president and CEO of Sacramento-based Sutter Health, is starting from that same premise — and outlining how his system is responding. “You have to grow your way through this,” he said at Becker’s Annual Meeting, pointing to a strategy centered on ambulatory expansion, tighter care coordination and controlling utilization rather than adding beds. Sutter is tripling its leadership development investment, scaling digital and AI capabilities, and pursuing a multistate expansion through a proposed combination with Minneapolis-based Allina Health that would create a 39-hospital, $26 billion system.
Together, these perspectives map the new operating reality for hospitals. Mr. Van Gorder defines the floor — a system where efficiency alone can no longer close the gap. Mr. Thomas outlines one path forward from that floor: growth, scale and a shift away from hospital-centric care. For CEOs, the strategic question is becoming less about whether to transform and more about how quickly and at what scale.
But the two paths are not equally accessible. Executing Sutter’s strategy — a 39-hospital combination, a tripled leadership budget, a systemwide ambulatory pivot — requires balance sheet strength, geographic fit and cultural runway that not every system has. The pressures Mr. Van Gorder describes, meanwhile, are universal: same federal policy, same payer mix strain, same workforce costs. The result is an industry quietly sorting itself, with the space between scaled transformation and acute strain getting narrower.
3. The physician labor market is splitting.
Several reports this week point to a physician workforce that is no longer moving in one direction.
On compensation, the latest Medscape data shows divergence across specialties. Cardiology led with a 10% year-over-year increase, followed by ophthalmology and radiology at 9%, and several hospital-based specialties at 8%. At the same time, seven specialties saw pay cuts in 2026, including psychiatry and allergy and immunology, down 3%, and pulmonary medicine and oncology, down 2%. That follows previous Becker’s reporting showing some of these same specialties, including pulmonary and oncology, continuing a multiyear downward trend, even as overall physician pay rose 3%.
At the same time, the physician shortage is intensifying, with a projected gap of 141,160 physicians by 2038, but how systems compete for that shrinking pool is also shifting. Leaders say compensation is no longer the primary differentiator. Instead, physicians are prioritizing cultural fit, autonomy and the ability to practice at the top of their license. Work-life factors — call expectations, protected time, manageable volumes and team-based support — are increasingly decisive in recruitment.
Physician pay is no longer moving in one direction. Specialties such as pulmonary medicine and oncology continue to lose ground, while procedural and outpatient-aligned fields pull ahead, signaling where financial momentum, and likely investment are concentrating.
At the same time, systems are shifting how they compete for talent. As compensation hits practical limits, recruitment is increasingly driven by culture, work-life design and physicians’ ability to practice at the top of their license. Taken together, the physician labor market is not just tightening — it is segmenting, with both pay trajectory and practice environment shaping where physicians go and stay. This requires health systems to ensure they offer not just a competitive compensation strategy, but also provide workforce flexibility and attractive care model designs, especially for high-demand specialities.
At Becker's 4th Annual CEO + CFO Roundtable, taking place November 2–5 in Chicago, more than 1,500 hospital and health system executives tackle decisions that determine whether organizations thrive or merely survive: protecting margins under cost pressure, choosing where to grow, renegotiating payer relationships, stabilizing the workforce and proving real ROI on technology. This is where leaders work through them together, face-to-face. Apply for complimentary registration now.
