As federal policy changes continue to pressure hospital budgets heading into 2027 — cuts to Medicaid, 340B program changes and site-neutral payment proposals among them — CEOs are increasingly navigating a parallel challenge: how to make difficult financial decisions without fracturing the workforce trust that holds organizations together.
Ten hospital and health system CEOs shared their approaches with Becker’s, and a clear throughline emerged: employees are more capable of absorbing hard news than most leaders assume. What they are far less willing to accept is being kept in the dark.
“Employees don’t expect every decision to be easy or popular, but they do expect us to be honest with them,” said Parinda Khatri, PhD, CEO of Knoxville, Tenn.-based River Valley Health. “In our experience, most employees can handle difficult news better than they can handle surprises.”
Dr. Khatri put that principle into practice during a recent EHR transition, when her team was candid with staff that some would be giving up a familiar system for the sake of the organization’s longer-term capabilities. Additional support was built into the transition specifically to help affected employees through it.
“Maintaining trust means acknowledging those tradeoffs rather than minimizing them, explaining the why, and making sure employees know they will not be left to navigate the change alone,” she said.
For leaders in markets where financial pressure is most acute, the obligation to communicate honestly carries even more weight. Justin Harris, CEO of Daviess Community Hospital in Washington, Ind., said rural hospitals bear the sharpest edge of the current environment.
“It’s no secret that healthcare is difficult; specifically in rural markets, we are getting hit the hardest,” Mr. Harris said. His approach pairs candid disclosure of external pressures with an equally clear articulation of the path forward: “Our job as CEO is to manage and mitigate the impact of future external factors, while continually creating new ideas, new revenue streams and thinking outside the box on future investment opportunities.”
At Sinai Chicago, a safety-net system navigating Medicaid reimbursement pressure tied to HR1 legislation, President and CEO Ngozi Ezike, MD, said the organization has been direct with caregivers about the financial stakes and the tradeoffs they sometimes require.
“We are transparent about the challenges, and we keep our mission at the center of every decision, taking a collective responsibility for addressing these hurdles,” Dr. Ezike said. “While not every caregiver will agree with every choice, they know their leaders are telling the truth and fighting to protect both them and the patients we serve.”
Being transparent about the numbers themselves, not just the narrative around them, is a strategy several CEOs have leaned into. Brad Meyer, CEO of Bluestem Health in Lincoln, Neb., holds monthly virtual all-staff meetings where he walks staff through month-end financials and opens the floor for questions. When Bluestem recently converted one of its family medicine clinics into a pediatric clinic — a move that allowed the organization to redeploy family medicine staff to locations where recruiting had been difficult — Mr. Meyer’s team notified affected employees before the organizationwide announcement and explained the reasoning behind the change.
“I’ve learned that employees won’t always agree with every decision, but being open, listening to their concerns, and doing what you say you’ll do are key to earning and maintaining their trust,” he said.
Brady Haynes, CEO of Seneca Healthcare District in Chester, Calif., takes a similar approach, sharing department-level data on budgets, productivity and overtime so employees understand the context for decisions before they are made. The district has been in a period of significant growth and operational change, including the opening of the new Lake Almanor Community Hospital. Throughout that process, Mr. Haynes said, the organizing principle has remained the same.
“Employees are more engaged and supportive of difficult decisions when leaders communicate honestly, provide meaningful context, and create opportunities for staff to participate in shaping solutions,” he said. “When people understand both the challenges and the path forward, they are more likely to remain invested in the success of the organization.”
That participatory model, in which employees are enlisted in generating solutions rather than simply receiving decisions, is where several CEOs drew a meaningful distinction. Kathy Parrinello, RN, PhD, president and CEO of University of Rochester Medicine’s Strong Memorial Hospital and Highland Hospital in Rochester, N.Y., has engaged frontline staff to identify supply chain waste and unnecessary workflows as part of a broader effort to reduce costs without compromising care quality.
One initiative she described goes further: an optimization of the organization’s advanced practice provider workforce, which surfaced that APPs were often performing work that nurse navigators and other roles could handle. By redesigning how APP time was allocated, the organization freed up APPs to focus on patient visits, addressing access demand while controlling labor costs.
“Given the demand we have for access to outpatient visits, this has been successful in generating more revenue while controlling labor costs and creating greater satisfaction among our APPs,” Dr. Parrinello said.
Allen Smith, MD, president and CEO of South Shore Health in South Weymouth, Mass., described the underlying logic.
“I believe in involving the people closest to the work because their perspectives matter and lead to better decisions,” he said. “The most effective decisions are rarely made in isolation.”
Dr. Smith said that when leaders communicate openly and make decisions with people rather than simply for them, they build the trust organizations need to move forward.
“People are smart, and they know when leaders are authentic,” he said. “Integrity and respect may seem fundamental, but they are never unnoticed.”
Andrew Molosky, president and CEO of Chapters Health System in Temple Terrace, Fla., framed it as a commitment that holds even when outcomes are painful.
“We cannot promise every decision will be easy or popular, but we can commit to treating people with dignity, maintaining accountability, and empowering team members with opportunities to ask questions and contribute,” Mr. Molosky said. “Ultimately, trust is earned through our actions.”
Making those actions visible, and doing so before a crisis requires it, is the approach Scott Klein, MD, president and CEO of Mt. Washington Pediatric Hospital in Baltimore, described. Through what the hospital calls high-reliability leadership rounding, leaders work to build relationships with team members and establish open lines of communication well before challenging situations arise. When Mt. Washington recently consolidated some services, that foundation was already in place.
“Employees may not always agree with a decision, but they are more likely to maintain trust when they feel heard, respected, and treated with compassion,” Dr. Klein said.
Michelle Riley-Brown, president and CEO of Children’s National Hospital in Washington, D.C., pairs visibility with structured recognition. The hospital’s monthly Power of One award celebrates staff members nominated by colleagues for embodying core values, and Ms. Riley-Brown amplifies those honorees in her monthly internal newsletter. She also participates in Care Cart rounds, bringing snacks and comfort items to staff during long shifts.
“People choose a career in healthcare because they believe deeply in the mission,” Ms. Riley-Brown said. “Ensuring they feel seen and valued helps strengthen the trust and engagement needed to move through difficult moments together.”
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