Q&A: State of the healthcare industry 2026

What is the role of AI in healthcare? How can systems better manage payer dynamics? And how can an organization protect its long-term financial position?

Finance leaders from diverse healthcare systems — ranging from community hospitals to large academic centers — shared candid perspectives on those topics and more at a small-group session sponsored by Bank of America at the recent HealthLeaders CFO Exchange. While many themes echoed broader industry concerns, this session offered a sharper lens on AI’s real-world impact, operating margin pressures and strategic readiness for future disruptions — the top priorities for not-for-profit health system financial leaders.

Q: Where does the industry stand in terms of implementing AI — and actually achieving a return on the investment?

For healthcare organizations, AI is no longer a theoretical concept. In addition to AI’s early use in clinical documentation and in surgical applications, it’s being actively deployed in the revenue cycle management (RCM) space — although the focus is more on automating tasks rather than using full-blown generative AI. So far, the goal has been using AI to offload mundane tasks and achieve measurable ROI. But even in that more limited capacity, skepticism remains high. Many systems report that AI has yet to deliver promised man-hour reductions and instead has led to workforce redeployment rather than cost savings.

On the billing side, however, providers have been forced to adopt AI as a defensive move, because payers are aggressively using AI to deny claims at scale — up to seven denials per second. Attendees said initial denial rates of 20% to 30% oſten drop to just 1% upon appeal, reinforcing the belief that denials are a deliberate delaying tactic.

Despite these challenges, success stories are emerging. One system reported a multimillion ROI using a case-level imaging soſtware. Others are experimenting with bolt-on technology to enhance ERP systems. Larger systems are exploring partnerships with vendors, while smaller hospitals — oſten unable to afford direct investment on AI — are outsourcing RCM to vendors with embedded AI capabilities.

Q: How do healthcare leaders assess options to manage workforce, patient care and revenue challenges?

Every organization is evaluating how it delivers services to the community and if there are better or more efficient alternatives. Larger systems are looking to affiliations and telemedicine, while others are divesting pediatric outpatient care or partnering for inpatient services. Urgent care centers, oſten loss leaders, are being reevaluated; partnering with other organizations or extending primary care hours are possible alternatives.

On the bright side, executives seem to have emerged from the pandemic with good processes to manage supply chain issues without carrying excessive inventory. Similarly, telemedicine has maintained its relevance post-pandemic, with continued payer reimbursement. However, virtual nursing remains unreimbursed, limiting its scalability. Systems are still assessing how to integrate virtual care models sustainably.

Labor remains a persistent challenge. Organizations are working to reduce reliance on traveling nurses, stabilize staffing through retention bonuses and reinvest in training. However, bonuses alone aren’t enough in a highly competitive labor market. Clinical rounds and training programs are less robust than in the past, requiring health systems to train internally. There’s also a push to engage students earlier, building passion and pipelines for future healthcare professionals.

Q: How are CFOs managing margin pressure and addressing cost concerns?

Post-pandemic operating margins have rebounded slightly, but not fully, attendees reported. Many systems are still under pressure, especially as Medicaid reimbursement is used to drive down commercial rates. CFOs emphasized that hospitals operate as semi-socialized businesses, unlike insurers, pharmaceutical or device companies that face fewer regulatory constraints.

Although each individual situation varies, most CFOs said they feel their financial position is stable for the next one to two years. But they are bracing for a significant dip in reimbursement and margins aſter 2026, particularly aſter elements of the federal One Big Beautiful Bill act take effect. Consulting firms are being engaged to help develop systemwide cost structures and position organizations for favorable bond refinancing. Strategic planning must include a five-year timeframe.

The consensus among these executives is clear: Cost-cutting alone is not a solution to the challenges facing the industry, particularly in light of the likely funding gaps that will be created by upcoming legislative changes.