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Why a Conversation May Be the Highest-ROI Investment a Healthcare CEO Can Make

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One of the most impactful leadership tools isn’t a new technology, consulting framework, or operational initiative. It’s being human. 

Hospital and health system leaders spend countless hours reviewing financial dashboards, quality metrics, staffing ratios, and strategic plans. Yet one of the most impactful leadership tools is much more simple: lunch.

Yes, as in food and conversation. Specifically in this case, a simple practice called “Check-ins with Charles.”

At our June 2026 HealthLeaders CEO Exchange in Avon, Colorado, some of healthcare’s top executives gathered for an honest conversation about leadership, culture, financial performance, and the future of the industry.

During the discussion I moderated, Charles Williams, regional president at Baylor Scott & White, covered everything from revenue cycle management and physician engagement to CEO succession planning.

Yet one of the most compelling ideas shared that afternoon (and that had all the other CEOs rapidly engaging) had nothing to do with technology, reimbursement models, or operational restructuring. It was Williams’ leadership initiative “Check-ins with Charles.”

The concept is remarkably simple. On a regular basis, Williams invites a randomly selected group of employees—from nurses and environmental services staff to finance professionals and administrative team members—to an informal Chick-fil-A lunch. There is no PowerPoint presentation. There are no scripted talking points. There is no formal agenda. The purpose is simply to listen.

As Williams explained during the discussion, the impact has gone far beyond an hour spent sharing a meal.

“When that email goes out,” he told the group, “it’s not that guy, it’s Charles.”

That distinction may sound small, but in today’s healthcare environment, it represents something much larger: trust.

Healthcare executives spend enormous amounts of time analyzing financial statements, reviewing quality metrics, discussing workforce shortages, and developing strategic plans. Those activities are essential. But as the CEO Exchange conversation repeatedly demonstrated, strategy only succeeds when people believe in the leaders asking them to execute it.

Trust Before Strategy

Healthcare leaders often focus on execution. We talk about operating margins, revenue cycle performance, patient experience scores, physician productivity, employee retention, and quality outcomes.

Those metrics matter, but execution doesn’t begin with dashboards. It begins with trust.

One of the recurring themes throughout the CEO Exchange was that organizations often fail to communicate proactively because leaders and employees simply don’t know one another well enough. Everyone is busy. Calendars are full. Meetings dominate the day. Yet when leaders become disconnected from the frontline, small problems stay hidden until they become expensive crises.

Williams described how “Check-ins with Charles” has become one way to eliminate that disconnect.

The informal lunches allow employees to speak openly in a setting where titles disappear. Clinical and non-clinical staff have an opportunity to ask questions, offer suggestions, and discuss concerns directly with the CEO.

He complements those lunches with another simple communication strategy: a monthly three-minute video message. Sometimes the videos are intentionally lighthearted—wearing a Valentine’s shirt covered in hearts or joking with employees—to demonstrate vulnerability and approachability.

The objective isn’t entertainment, it’s accessibility, and employees stop seeing “the president” and begin seeing a person.

That shift has produced measurable results.

Williams shared that following these consistent communication efforts, his organization achieved the highest employee engagement survey participation rate in its history.

Participation itself isn’t the end goal, but it is an important indicator. Employees generally do not take time to provide honest feedback unless they believe leadership is genuinely listening and prepared to act on what they hear.

Communication Is Operational Strategy

Several executives around the table reinforced the same lesson with their own experiences.

One CEO of a health system in Connecticut described taking over responsibility for revenue cycle despite coming from a nursing background. Rather than pretending to understand every technical aspect of billing and coding, she gathered everyone into one room and admitted what she didn’t know.

Many of those employees had worked in the same building for years but had never truly collaborated.

Together, they established shared expectations, defined key performance indicators, and began meeting regularly.

The results were dramatic.

Claim denials declined significantly. Departments that previously blamed one another started solving problems together. Frontline registration staff, physicians, coding teams, and revenue cycle leaders finally understood how each person’s work affected the others.

The improvement didn’t begin with a new software platform. It began with communication.

Another executive discussed regularly spending half a day shadowing frontline employees. Dressed in scrubs, he works alongside environmental services, nurses, and other team members—not as a symbolic exercise, but as a learning opportunity.

Those interactions consistently reveal operational problems that never surface in executive conference rooms.

Employees become comfortable sharing frustrations, identifying inefficiencies, and suggesting improvements because the hierarchy has temporarily disappeared.

Another participant emphasized that finance leaders should spend time in clinical environments, while clinicians should gain greater appreciation for financial decision-making. When each group understands the other’s daily challenges, collaboration replaces conflict.

As one executive noted, communication is often the bridge between operational excellence and financial performance.

The Hidden ROI of Listening

Communication is frequently categorized as a ‘soft skill,’ and honestly my boss always told me to stay away from these soft stories, but the executives at the CEO Exchange argued exactly the opposite.

Strong communication produces measurable business outcomes.

Research has indicated that organizations that foster open dialogue often experience:

  • Higher employee engagement and retention
  • Better cross-functional collaboration
  • Earlier identification of operational issues
  • Faster execution of strategic initiatives
  • Greater psychological safety for innovation
  • Stronger patient experiences driven by more engaged caregivers

These observations align with broader workforce research. The firm Gallup has consistently found that highly engaged business units outperform less engaged teams across profitability, productivity, turnover, safety, absenteeism, and customer satisfaction. While healthcare has its own unique challenges, the underlying principle remains the same: Engaged employees produce stronger organizational performance.

The roundtable offered numerous examples.

Finance leaders make better decisions after seeing clinical operations firsthand.

Clinicians become more thoughtful stewards of organizational resources when they understand how financial performance affects future investments.

CEO Turnover Comes at a Cost

The conversation eventually shifted to another challenge facing healthcare organizations: executive turnover.

Participants noted that the average tenure of a hospital CEO today is generally somewhere between three and five years, a figure that aligns with data from the American College of Healthcare Executives (ACHE), which has long reported average hospital CEO tenure at approximately five years nationally.

The executives argued that frequent leadership turnover carries enormous organizational costs.

Every leadership transition requires employees to learn a new leadership style, interpret new priorities, and adapt to another strategic vision.

One executive described the experience as traumatic for organizations.

Instead of concentrating on executing strategy, employees spend valuable time trying to understand the expectations of the incoming CEO.

Another participant observed that boards are often searching for a “silver bullet” during difficult financial periods, replacing leaders before long-term strategies have time to mature.

The result can be an endless cycle of organizational resets.

Several executives pointed to health systems where senior leaders have remained in place for more than a decade as examples of how leadership stability creates a competitive advantage.

Williams discussed Baylor Scott & White’s intentional focus on developing internal leadership pipelines. Potential future presidents and chief operating officers are paired with experienced mentors well before succession becomes necessary, ensuring continuity and preserving organizational culture rather than forcing each new leader to reinvent it.

Culture Isn’t Built in the Boardroom

Perhaps the most memorable story shared during the discussion came from another longtime hospital CEO.

While ordering lunch in the cafeteria, he asked for a very small salad.

The cafeteria employee smiled, placed a single piece of lettuce into the bowl, and asked, “Is that small enough for you?”

Rather than feeling disrespected, he viewed it as one of the proudest moments of his career.

The interaction demonstrated that an employee felt comfortable enough to joke with the CEO.

There was no fear, there was trust.

That, the group agreed, is what culture looks like.

Not mission statements.

Not values posters hanging in hallways.

Not speeches from the executive suite.

Culture is built through everyday interactions that convince employees they are seen, heard, respected, and safe enough to speak honestly.

Leadership That Listens

Healthcare continues to face unprecedented pressure—from workforce shortages and financial uncertainty to AI, rising consumer expectations, and increasing regulatory complexity.

No CEO can personally solve every challenge facing a modern health system.

Every CEO, however, can create an environment where employees feel comfortable identifying problems early, collaborating across departments, and contributing ideas before issues become crises.

That is the real lesson behind “Check-ins with Charles.”

It isn’t really about Chick-fil-A or even about lunch. It is about replacing hierarchy with humanity.

The conversations in Avon made one thing abundantly clear: Organizations that invest time in authentic communication build trust. Trust strengthens culture. Strong cultures execute strategy more effectively. And better execution ultimately produces stronger financial performance.

For healthcare leaders searching for a competitive advantage in an increasingly complex industry, one of the highest-return investments may not be found in the next technology platform or consulting engagement.

It may simply be sitting down at a table, sharing a meal, and asking one question:

“What do you think we could do better?”

The Fragile Economics of Safety-Net Care

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Minnesota lawmakers approved a $205 million funding package to stabilize Hennepin Healthcare, but it underscores that the safety-net risk is escalating. Here’s what Hennepin told us.

KEY TAKEAWAYS

Hennepin’s financial struggles highlight how hospitals with heavy Medicaid and uninsured populations remain vulnerable when reimbursement growth lags expense inflation.

CFOs should model scenarios involving Medicaid funding reductions, rising uncompensated care, and sustained labor-cost pressures to assess liquidity and capital needs.

While government funding can provide short-term relief, finance leaders should focus on long-term sustainability through revenue diversification, service-line optimization, and proactive advocacy efforts. 

Hennepin Healthcare’s financial crisis has become one of the most closely watched healthcare stories in the country. Now bolstered with state funding, its story illustrates the mounting pressure on safety-net hospitals.

The CFO Take Away

Think of this headline as an underscore to the growing vulnerability of health systems whose payer mix is concentrated in government programs. Hennepin Healthcare’s situation demonstrates that even large, clinically essential institutions can find themselves in liquidity crises when reimbursement growth consistently trails expense inflation.

CFOs should view this as a warning to stress-test their organizations against scenarios involving Medicaid funding reductions, higher uncompensated-care volumes, and continued labor-cost pressure. The strategy lesson here is that traditional margin-improvement initiatives alone may not be enough. CFOs should be strengthening advocacy efforts, diversifying revenue streams where possible, reassessing service-line profitability, and building long-range capital plans that assume greater reimbursement volatility.

The market is tightening, and the broader takeaway is that safety-net economics are becoming a board-level risk issue. Organizations that wait until cash reserves deteriorate before pursuing structural solutions will find themselves relying on emergency legislative interventions rather than executing deliberate financial strategy.

The System

Hennepin Healthcare leaders have warned lawmakers that the organization faces severe financial challenges driven by a combination of factors: rising labor and operating costs, inadequate reimbursement from government programs, and a heavily Medicaid-dependent population.

The system has already tried to shrink costs by reducing beds and eliminating services, while seeking additional state support to stabilize operations. But policymakers ultimately negotiated a funding package worth approximately $205 million to help preserve the organization’s role as Minnesota’s largest trauma center and a critical provider for vulnerable and low-income populations.

In an email to me, the system stated:

“Hennepin Healthcare is deeply grateful to the lawmakers who acted with urgency and collaboration, and to our employees, patients, and advocates whose voices brought needed attention to this crisis. The stabilization funding does not resolve the long-term impacts of HR1 or the structural deficits that uniquely challenge safety-net hospital systems. But it does accomplish two essential things: it delivers historic support that sustains us, and it gives us the time and stability to work with the state on durable, long-term solutions.

Our immediate priorities are to stabilize our team and invest in patient care while carefully stewarding the funds allocated to us. We have essential needs that have been deferred because of financial challenges, including staffing, equipment, and other investments that support patient care.

Looking ahead, our strategy is focused on both operational improvement and long-term sustainability. We will continue working with state leaders, the Governor-appointed task force, and our future professional governing board to identify lasting solutions that strengthen Minnesota’s healthcare safety net and ensure Hennepin Healthcare can continue serving patients for generations to come.”

It’s clear the system views the package only as a bridge. It’s obviously not a solution. But beyond that, it’s also clear that this is not a Minnesota-confined story.

Hennepin Healthcare showcases the financial fragility of safety-net hospitals nationwide. In 2023, well before any of today’s Medicaid chaos, safety-net hospitals provided roughly $11 billion in uncompensated care.

Roughly three-quarters of Hennepin Healthcare’s patients are uninsured or covered by public insurance programs, creating a structural gap between the cost of care and reimbursement levels.

Hennepin Healthcare was projecting up to $50 million in operating losses for 2026 and a staggering $1.7 billion in deficits over the next decade. The organization’s repeated losses and dependence on government intervention underscore the challenges many urban safety-net systems face as Medicaid funding uncertainty, amongst other pressures, converge.

Nonprofit-private equity joint ventures worth scrutiny, PESP report says

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https://www.fiercehealthcare.com/finance/nonprofit-private-equity-joint-ventures-worth-scrutiny-pesp-report-finds

At least 568 healthcare facilities operate through nonprofit-private equity joint ventures, according to a new report calling for scrutiny into those arrangements.

The figure is likely an undercount, considering only public data were used. The report (PDF) was published by the Private Equity Stakeholder Project (PESP), a nonprofit that advocates for more disclosure about private equity deals.

More than a fifth of private equity (PE)-owned hospitals operate under joint venture arrangements with nonprofit health systems. Apollo Global Management-owned Lifepoint Health, for instance, runs nearly two-thirds of its hospitals through joint ventures.

Such joint ventures extend beyond hospitals, spanning subsectors such as inpatient rehab, hospice, home health, behavioral health, ambulatory surgery centers and urgent care, per the report. And regulations have not kept up with these evolving complex ownership structures. 

“While joint ventures may be advantageous configurations for the businesses involved, PE-backed joint ventures may still represent the risks associated with PE buyouts in healthcare,” the report said.

The report identified several patterns related to such arrangements. First, joint ventures with a provider offer an opportunity for a PE-backed company to expand into new markets. Joint ventures may also help companies get around regulatory restrictions, like in some states that forbid non-doctors from owning medical practices. It may help avoid the challenges associated with converting a health system from a nonprofit to a for-profit. Joint ventures also grant access to private capital and may drive revenue from the sale of real estate, a practice critics have said fueled high-profile health system bankruptcies in recent years. 

One negative pattern, the report cautioned, is patient and caregiver risks due to poor facility conditions, declining care quality, reduced services and higher prices. PESP gave as an example Lifepoint’s involvement in Duke, where associated facilities have seen poor quality of care and have cut services. Lifepoint was the subject of a recent bipartisan Senate investigation, supported by other PESP research, which found underinvestment has affected patient care.

Another example worthy of caution, per the report, is Ascension, which, in addition to having a joint venture with Lifepoint, also works with PE firm TowerBrook Capital to acquire healthcare companies. This case study shows how executives and PE businesses make outsized profits from entering healthcare markets, despite clinician concerns about future negative impacts to patient care. 

While much of the public and an increasing share of policymakers have been wary of PE’s involvement in healthcare due to these cases and others, proponents contend that funds can help fill in gaps where public funding for healthcare falls short, such as by supporting services in underserved areas or providing resources and managerial expertise that would otherwise be out of reach. 

PESP’s report said the examples it documented “expose significant gaps in federal and state oversight of private equity in healthcare.” 

To address this, PESP recommends that the IRS update its joint venture guidance; that the HHS Office of the Inspector General update its guidance on anti-kickback statutes; and that CMS clarify whether exceptions to Stark Law—which protects medical decisions from financial conflicts of interest—apply in PE-backed joint ventures. PESP also called on the Federal Trade Commission and the Department of Justice to better scrutinize joint ventures that don’t trigger individual premerger review, but still amass market influence. 

Additionally, the report was accompanied by a public searchable database of 568 nonprofit-PE joint ventures as identified by PESP. The database is embedded on PESP’s site.

“Patients, payers and employees need protection from the risks associated with PE ownership of healthcare systems and joint ventures expose significant gaps in oversight and regulation,” the report concluded.

Inside the Conversations Shaping Hospital CEO Strategy in 2026

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https://www.healthleadersmedia.com/ceo/inside-conversations-shaping-hospital-ceo-strategy-2026

Hospital and health system executives at the HealthLeaders CEO Exchange prioritized growth and governance for a changing healthcare landscape.

KEY TAKEAWAYS

Hospital CEOs are investing in ambulatory care through integrated access points and strategic partnerships that expand services outside the hospital campus.

Leaders are standardizing enterprise functions where it creates value while preserving local decision-making so hospitals can respond to the needs of their communities.

Leadership continuity and succession planning are vital as organizations prepare for a future that looks considerably different than the past.

The HealthLeaders CEO Exchange offered a window into how hospital and health system leaders are viewing strategy during a time of unavoidable industry transformation.

Across two days of roundtable discussions in Avon, Colorado, executives shared approaches for remolding their organizations around care models that emphasize access, leadership structures that give local teams room to execute, and partnerships that create value for patients and communities.

Here’s a look at the conversations that took place and what they mean for the immediate future of hospital decision-making.

Growth follows the patient

Ambulatory care strategy has become imperative for providers wanting to grow in the current environment in which care isn’t bound by the hospital’s four walls.

Several CEOs spoke about creating integrated care sites that combine primary care with behavioral health, dental services, rehabilitation, and optometry. Others discussed hybrid emergency department and urgent care facilities that simplify access for patients who are unsure where to seek treatment. Mobile care services and virtual specialty were also highlighted as organizations look for ways to expand access across urban and rural markets.

One executive described an approach that challenged years of competition between neighboring organizations.

“Historically, the CEOs hated each other,” the executive said. “When she and I both became CEOs, within six months of each other, we were like, ‘Let’s start a different path.'”

The relationship led to a shared walk-in clinic that has since become a wider ambulatory strategy across the region. The model increased access, generated revenue for both organizations, and strengthened relationships with community leaders, according to the executive.

Another participant described their organization’s philosophy as “no wrong door,” with patients entering the system through whichever service best fits their needs while gaining access to additional care during the same visit.

The discussion reflected how executives are focusing on bringing care closer to patients through flexible access points that improve convenience and support long-term financial performance.

Balancing scale and local leadership

As health systems continue to grow, CEOs are rethinking ways to preserve decision-making close to the communities they serve.

Executives at the Exchange described centralizing functions such as marketing and revenue cycle while allowing local leaders to shape implementation based on market conditions. Several attendees said enterprise standards provide direction, though each hospital requires flexibility to address its workforce and patient population.

One executive summarized their philosophy in three words: “Implementation is local.”

That perspective echoed an earlier discussion on systemness, where leaders debated which functions benefit from standardization and which remain stronger when managed locally. Participants acknowledged that scale can improve efficiency, though additional layers of governance can also slow decisions and weaken ties to the community.

Accountability starts with setting clear expectations for local leaders and sharing what works across the organization.

Leadership evolves with the organization

Roundtables at the Exchange also revealed how leadership expectations continue to change.

Executives spoke about building stronger relationships across finance, operations, and clinical teams through greater transparency and more frequent collaboration. Several described spending time with frontline employees and creating environments where staff feel comfortable raising concerns. Those efforts, participants said, strengthen trust and improve execution.

Leadership continuity also emerged as an important advantage. Executives said longer CEO tenures help strengthen relationships with physicians, employees, community organizations, and elected officials while giving strategic initiatives time to mature.

When change does happen, internal succession planning can mitigate organizational turbulence, with leadership development serving as an investment in long-term organizational stability.

Ultimately, one message became clear by the end of the Exchange: Hospital leaders are looking well past incremental improvements.

“The hospital models are dead,” a rural hospital executive said. “Everybody’s trying to do CPR on the old model versus thinking about what’s the new model.”

Whether it’s ambulatory expansion, virtual care, partnerships, leadership structures, or organizational design, CEOs are strategizing through the lens of what comes next.

Is the Payer-Provider Battle of the Bots Driving Healthcare Costs Higher?

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https://www.healthleadersmedia.com/revenue-cycle/payer-provider-battle-bots-driving-healthcare-costs-higher?utm_source=HealthLeaders&utm_campaign=2079f50b05-EMAIL_CAMPAIGN_2026_06_25_03_37&utm_medium=email&utm_term=0_adc94e5966-2079f50b05-532959885&mc_cid=2079f50b05&mc_eid=71a6a1464f

With commercial medical costs projected to increase 9.0% in 2027, patients are feeling the financial squeeze from administrative friction generated by the payer-provider AI arms race.

KEY TAKEAWAYS

PwC projects a 9.0% commercial medical cost trend for group plans in 2027, driven by structural inflators like AI-enabled documentation tools, rising specialty pharmacy costs, and IDR payments. 

As payers aggressively deploy AI-driven pre-payment reviews to combat rising costs, providers are automating their defenses, creating an expensive administrative arms race that fails to lower systemic costs for the consumer.

To navigate this financial squeeze without alienating their communities, health systems must shift away from back-end collections and prioritize transparent, empathetic pre-service financial clearance.

Last year, PwC projected a 8.5% medical cost spike in the commercial group market. Unfortunately, the professional services company’s forecast for the next year does not suggest there will be any relief for rising healthcare costs.  

According to PwC’s latest Medical Cost Trend: Behind the Numbers report, the 2026 group cost trend has been retroactively adjusted upward to 9.0%. Looking ahead to 2027, health plan actuaries expect that 9.0% growth rate to sustain in the group market, alongside an 8.5% increase in the individual market.

With historical deflators, like biosimilars and site-of-care shifts now fully embedded into the baseline, the cost environment heading into 2027 represents a structural shift rather than a temporary spike, according to the report. 

Five Cost Inflators in 2027

Health plan actuaries point to five distinct inflators driving medical costs higher across the commercial sector.

1. AI-Enabled Revenue Optimization 

While revenue cycle leaders may say that payers started the battle of the bots, provider use of AI-powered scribes and ambient documentation tools are leading to higher E/M levels and higher-severity DRG assignments. Consequently, health plans are seeing higher billed allowed amounts and increasing per-member-per-month trends without a corresponding change in actual care utilization or contracted rates.

2. Provider Reimbursement Pressures 

Hospitals continue to face elevated labor expenses and rising input costs for drugs and supplies. To offset these structural costs, health systems are leveraging market consolidation to negotiate higher commercial reimbursement rates.

3. Surging Pharmacy Costs 

Pharmacy trend continues to outpace overall medical trend. Spending on cancer medicines alone reached $143 billion in 2025. Additionally, high-cost GLP-1 therapies are expanding well beyond obesity treatment, securing FDA approvals for cardiovascular disease and chronic kidney disease.

4. Behavioral Health Utilization 

Between 2018 and 2024, behavioral health visit rates increased by 62.6%. Unlike other medical categories that are driven by unit cost, the behavioral health trend is actively fueled by sustained increases in patient utilization.

5. IDR Arbitration 

The No Surprises Act’s Independent Dispute Resolution (IDR) process has become a significant revenue driver for providers. Providers won roughly 88% of payment determinations in the first half of 2025. A 2025 report found that IDR had generated $5 billion in costs, including $2.24 billion in direct payments to providers. 

Looking at the Bigger Picture

While AI has been sold as a tool to improve efficiency, the technology has so far driven an expensive administrative arms race rather than acting as a systemic cost deflator. On the health systems side, providers are using AI-powered scribes and documentation tools to capture greater complexity and patient acuity. Meanwhile, health plans are deploying their own technology to auto-triage complex claims, detect billing anomalies, and flag provider outliers before funds are ever released.

Administrative friction between providers and payers ultimately causes patients to delay or interrupt necessary clinical care. It is critical that payers and providers work together to prevent this, according to Ryan Thompson, Chief Revenue Cycle Officer at Providence. 

“It’s incumbent on both payers and providers to identify what we can do differently to mitigate that friction that causes patients to interrupt or delay care,” Thompson says.

This puts revenue cycle leaders in a tricky position, where they are expected to drive collections from cash-strapped patients without alienating local communities by focusing solely on revenue optimization. 

To counteract the 2027 cost trajectory without damaging patient trust, health systems must prioritize transparent, pre-service financial clearance. Ryan Klein, Senior Director of Patient Access and Financial Experience at UW Health, emphasized that leaning into empathy and flexibility ultimately protects both the patient and the bottom line.

“An experience-first approach, I don’t think it undermines revenue goals,” Klein stated. “I think it just simply sets up the patient to contribute to their out-of-pocket liability in the way that best works for them.”

What Revenue Cycle Leaders Need to Know About the IDR Final Rule

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The Federal IDR Operations final rule introduces vital changes to fees, batching, and eligibility, but a lack of federal enforcement leaves providers battling payers for post-decision payments.

KEY TAKEAWAYS

The final rule slashes administrative fees and relaxes batching constraints to make pursuing lower-dollar claims much more financially viable for providers.

Payers must now provide essential claim details upfront to streamline eligibility determinations and reduce administrative friction.

Revenue cycle leaders should advocate for legislative action to hold payers accountable because the new rule lacks mechanisms to enforce post-decision payments.

While there is a significant administrative lift that comes with navigating the Federal Independent Dispute Resolution (IDR) process comes with a heavy administrative lift, the system has proven to be a significant driver of recovered revenue for providers.

To address operational friction for all parties, federal regulators have finalized the Federal IDR Operations rule. This update includes adjustments designed to standardize data, clarify timelines, and streamline the process.

For revenue cycle leaders, understanding these updates is essential to maintaining compliance and optimizing cash flow without adding unnecessary overhead.

Open Negotiation and Communication 

The final rule mandates that all parties use the federal open negotiation portal to initiate the dispute process.

This requires providers to submit standardized data elements, creating a uniform communication channel. By centralizing the exchange, regulators aim to move away from the chaotic web of emails and spreadsheets that have often complicated early-stage resolutions.

Clarifying Eligibility 

Determining IDR eligibility has been a time-consuming step for revenue cycle teams, but the final rule shifts more responsibility to payers.

Payers must now provide essential claim details at the time of the initial payment or denial. This includes the Qualifying Payment Amount (QPA) and specific remittance codes indicating whether a claim falls under state or federal jurisdiction. This upfront transparency allows providers to accurately assess eligibility before committing resources to a dispute.

Reducing IDR Fees 

Perhaps most notably, the final rule reduces the non-refundable administrative fee to just $15 per party, per dispute. This represents an 85% drop from the previous $115 rate.

While the final rule establishes that these fees will now be collected earlier in the workflow to maintain system capacity, the lower financial barrier to entry makes it far more viable for providers to pursue arbitration for lower-dollar claims. Ultimately, this allows revenue cycle teams to seek out-of-network reimbursements without the fear that the administrative cost of the dispute will eclipse the potential recovery.

Revamped Batching Rules 

New batching rules will help providers to more efficiently manage IDR costs and consolidate efforts by relaxing previous constraints and offering clearer guidelines for grouping claims.

Providers can now batch items and services billed under the same or similar service codes. To qualify, these claims must involve the same provider and the same payer, and they must have occurred within a specified 30-day window.

Enforcing the Cooling-Off Period 

The NSA originally established a 90-day cooling-off period following a final determination to help manage dispute volumes.

The final rule explicitly clarifies how this timeline is triggered and applied. Providers cannot continuously submit the same disputed item or service code for the same payer once a determination is made. Revenue cycle teams will need to refine their internal tracking processes to ensure compliance with the cooling-off window and avoid administrative dismissals.

Will Payers Play Nice? 

While the final rule clarifies details of the IDR process, it neglected to address comments from providers calling for an enforcement mechanism. Health systems are increasingly winning their IDR cases, only to find that payers are simply refusing to remit the owed amounts, according to Kathy Stull, manager of revenue cycle and analytics for HFMA. 

“Instead of even getting the incorrect payment, they’re not going to pay anything,” Stull noted during the recent HFMA Region 1 Annual Conference.

If payers fail to make post-decision payments, revenue cycle leaders and health system government relations teams should advocate for H.R. 4710, a proposed bill that would impose civil monetary penalties on insurers for every instance they fail to pay following an IDR loss.

What Presbyterian’s Medicare Advantage Exit Really Means

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https://www.healthleadersmedia.com/cfo/what-presbyterians-medicare-advantage-exit-really-means?utm_source=HealthLeaders&utm_campaign=47eb55e4f5-EMAIL_CAMPAIGN_2026_06_11_05_05&utm_medium=email&utm_term=0_adc94e5966-47eb55e4f5-532959885&mc_cid=47eb55e4f5&mc_eid=71a6a1464f

Presbyterian Healthcare Services’ decision to exit most Medicare Advantage plans and eliminate 150 positions underscores a growing reality for provider-sponsored health plans.

KEY TAKEAWAYS

Rising utilization, reimbursement pressure and regulatory scrutiny are forcing organizations to reassess participation in Medicare Advantage.

Presbyterian’s move reflects a decision to prioritize care delivery and long-term financial stability over maintaining an unprofitable business line.

Financial flexibility and access to capital increasingly depend on demonstrating disciplined balance-sheet management.

Albuquerque-based Presbyterian Healthcare Services has announced it will discontinue most of its Medicare Advantage (MA) offerings beginning in 2027, affecting roughly 30,000 members, while laying off approximately 150 health plan and administrative employees. The system will continue operating its Dual Plus Special Needs Plan serving Medicare-Medicaid beneficiaries. According to Presbyterian, remaining in the broader MA market would limit its ability to invest in care delivery, workforce development and access initiatives across New Mexico. The move is another indication that provider-sponsored health plans are facing mounting pressure as MA margins tighten nationwide.

Many health systems entered Medicare Advantage to create integrated delivery models, diversify revenue streams and capture greater value from population health initiatives. However, elevated medical utilization, changing reimbursement dynamics and increased regulatory oversight have altered the financial equation. Presbyterian’s decision suggests leadership determined that the returns no longer justified the capital and operational resources required to compete effectively in the market.

The regional implications are significant. Presbyterian is one of New Mexico’s largest healthcare organizations, operating hospitals, clinics, physician practices and a health plan across the state. While the layoffs are concentrated in health plan and administrative roles, the exit removes a major local MA option and will require thousands of seniors to seek alternative coverage. At the same time, Presbyterian argues the move will allow it to redirect resources toward direct patient care and workforce investments, potentially strengthening healthcare delivery capacity over the long term.

There’s a larger lesson centered on strategic focus. Organizations often face pressure to maintain market presence across multiple business lines, even when margins deteriorate. Presbyterian’s action demonstrates the importance of regularly evaluating whether each service line advances the system’s long-term mission and financial objectives. Exiting a business can be difficult, but preserving capital for higher-value investments may ultimately create greater organizational resilience.

The decision also highlights why credit ratings deserve ongoing executive attention. Strong ratings are not simply a borrowing metric; they influence an organization’s ability to finance facilities, technology modernization, workforce initiatives and strategic growth. Rating agencies increasingly scrutinize operating performance, liquidity, leverage, governance and management’s willingness to make difficult strategic decisions when market conditions change. Fitch continues to maintain coverage on Presbyterian Healthcare Services, underscoring the importance of external evaluation of health system financial strength.

Healthcare organizations that delay corrective action risk eroding margins, weakening liquidity and increasing borrowing costs. Conversely, systems that demonstrate disciplined portfolio management often preserve stronger credit profiles and maintain greater access to capital during periods of industry disruption.

Presbyterian’s Medicare Advantage could signal a move towards strategic capital allocation, a growing priority in today’s environment. As reimbursement uncertainty and utilization pressures continue across healthcare, CFOs should view the announcement as a reminder that financial sustainability sometimes requires difficult choices today to preserve organizational strength tomorrow.

3 Headlines And What They Really Means for Healthcare CFOs

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These headlines point to a common theme for CFOs.

KEY TAKEAWAYS

Policy momentum continues to shift toward prevention, affordability, and population health, which is increasing the value of physician alignment and care management capabilities.

The biggest risk in price transparency isn’t fines—it’s how increased visibility into payer contracts and pricing structures could affect margins, negotiations, and market position.

One healthcare organization’s restructuring highlights a broader industry shift toward rewarding sustainable cash flow, liquidity, and financial flexibility over leveraged growth models.

Headline: Free primary care for all: Democratic think tank pushes the party on new health policy

Democratic strategists are promoting free primary care for all Americans as a more politically viable alternative to Medicare for All, aiming to address healthcare affordability and access ahead of the 2026 elections.

Why it matters: I do not think this proposal will become federal policy in the near future. However, it reflects a shift in healthcare reform politics. Instead of focusing on comprehensive insurance redesign, policymakers are increasingly exploring targeted affordability initiatives that can be more easily communicated to voters and potentially implemented incrementally. I have little doubt that primary care access, preventive services, and healthcare affordability are likely to remain prominent policy themes heading into the midterm election cycle.

The CFO Takeaway: This headline underscores the idea that primary care is becoming a strategic asset. If policymakers continue moving toward subsidized or universally accessible primary care models, health systems with strong employed physician networks, value-based care capabilities, and population health infrastructure could be positioned to benefit.

On the other hand, organizations that remain heavily dependent on downstream specialty and procedural volumes may feel the heat as policymakers and payers redirect resources toward prevention and early intervention. I say look at this as another signal that future reimbursement models may reward access, chronic disease management, and longitudinal patient engagement rather than episodic acute care. The question is not whether free primary care becomes law, but whether an organization’s capital allocation, physician alignment strategy, and care delivery model are prepared for a healthcare economy that places greater financial value on keeping patients healthy rather than treating them after they become sick.

Headline: Trump administration warns more than 500 hospitals to provide more price information or face fines

The Trump administration has intensified enforcement of hospital price transparency rules, warning more than 500 hospitals over alleged noncompliance. Hospitals that fail to disclose required pricing data could face penalties of up to $2 million annually, with officials signaling that additional enforcement actions are likely as the administration intensifies oversight of transparency requirements originally established during President Trump’s first term.

The CFO Takeaway: While hospitals have been required to publish machine-readable files and consumer-friendly pricing information for years, compliance has been uneven across the industry. Many CFOs have spoken to me about the difficulty in publishing usable pricing information; standardizing the masses of varying data is often just too complex and time consuming. This move is the administration’s latest shift from rulemaking toward active enforcement in this category. CFOs should focus on strengthening pricing governance, contract management, and payer negotiation strategies. The bigger risk is whether increased transparency exposes pricing weaknesses that could undermine future reimbursement, market position, and margins.

Industry POV: This headline is not fundamentally about fines, it’s about margin visibility and negotiating leverage. Price transparency is becoming a strategic financial issue. As payer rates and pricing differences become more visible, hospitals will face greater scrutiny from employers, insurers, competitors, and regulators.

Headline: GoHealth files for Chapter 11 to strengthen its position ahead of AEP 2026

GoHealth has filed a prepackaged Chapter 11 bankruptcy to reduce debt and strengthen its finances. The restructuring has strong backing from lenders and major stakeholders, allowing the company to continue normal operations, pay vendors, and maintain customer and payer relationships while emerging with a healthier balance sheet and lender-led ownership structure. The company expects to continue normal operations throughout the process, pay vendors in full, preserve relationships with health plans and consumers, and emerge from bankruptcy before the critical Medicare enrollment season begins.

Why it matters: While the announcement is framed as a restructuring, it is really the culmination of Medicare Advantage pressures. GoHealth has faced declining revenues, significant debt obligations, higher interest costs, and a challenging MA market with health plans increasingly focused on profitability, member retention, and tighter distribution economics.

The CFO Takeaway: This headline is ultimately unsurprising in today’s market. GoHealth’s restructuring shows how quickly leverage that seemed manageable during periods of growth can become a strategic constraint when industry economics shift.

GoHealth’s restructuring may ultimately be successful, but it highlights that healthcare organizations are increasingly being judged not just on revenue growth, but on their ability to generate sustainable cash flow and withstand prolonged reimbursement pressure. CFOs, is that shift influencing capital allocation decisions today?

Hospitals Are Operating More Efficiently, Yet Financial Performance Is Still Lagging

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Hospitals reduced expenses and improved throughput in March, but rising uncompensated care and worsening payer mix are limiting margins, Kaufman Hall’s latest data reveals.

KEY TAKEAWAYS

Hospital margins improved in March, but year-to-date performance remains below 2025 levels despite operational gains.

Expenses declined month-to-month, potentially signaling short-term stabilization, though drug and supply costs are significantly higher year-over-year.

Health systems are being pushed toward targeted resource allocation and outpatient-focused service-line strategies.

Hospitals are showing signs of stronger operational discipline in early 2026, but those gains have yet to translate into meaningful financial growth.

While margins improved modestly and expenses dipped slightly month-to-month in March, hospitals continue to face persistent pressures like an eroding payor mix and a rise in uncompensated care that are offsetting operational progress, according to Kaufman Hall’s latest National Hospital Flash Report.

The average monthly operating margin, inclusive of health system allocations for the cost of shared services, increased from 1.8% in February to 2.9% in March. That jump pushed the adjusted year-to-date operating margins to 1.7%, up from 1.3% in February. However, Kaufman Hall’s data shows hospitals are well below 2025 levels overall, highlighting that recent gains have not been enough to reverse financial headwinds.

Expenses declined across the board on a month-to-month basis, suggesting some short-term stabilization after earlier increases. Decreases were seen in total daily expenses (4%), daily labor expenses (2%), daily non-labor expenses (5%), daily supply expenses (1%), daily drug expenses (1%), and daily purchased service expenses (8%).

Still, costs remain elevated on a yearly basis, particularly related to drugs (10%) and supplies (11%). Even with the March dip, expense relief has been uneven and not yet sustained enough to materially improve margins.

At the same time, hospitals continue to demonstrate incremental operational improvements. The report found a 2% reduction in average length of stay month-over-month and a 3% drop year-over-year. Meanwhile, daily outpatient revenue stayed flat in March but rose 12% year-over-year, indicating efforts to improve throughput and shift care to lower-cost settings. Adjusted discharges increased 4% year-over-year in March, and equivalent patient days per calendar day fell 3% month-over-month and 2% year-over-year, pointing to gains in capacity management and patient flow efficiency.

Less encouragingly, hospitals are still contending with higher levels of bad debt and charity care, which jumped 18% year-over-year, reflecting a worsening payer mix and ongoing challenges with government payers relative to commercial reimbursement.

“Hospitals continue to see the effects of payor mix erosion and cost pressures,” Erik Swanson, managing director and data and analytics group leader at Kaufman Hall, said in a statement. “Proactive steps to strategically allocate resources and manage spend, through areas such as length of stay, outpatient care and growing expenses, will continue to be key.”

Regional variation is also a defining feature of the current environment. The Northeast posted margin improvement despite historically weaker financial performance, while hospitals in the West saw the most pronounced increases in drug expenses. Those two outliers showcase the uneven cost and revenue forces across markets.

For hospital leaders, the latest data is further evidence that operational improvement alone is unlikely to fully restore margins right now. Many health systems have already spent the past several years striving to improve efficiency in areas like staffing and throughput, meaning future gains may be harder to achieve through traditional cost-cutting alone.

Instead, executives must prioritize more targeted resource allocation and service-line strategy, especially as hospitals invest more in outpatient settings.

Why Atlantic Health’s CEO Is Treating Innovation as a ‘Cultural Shift’

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Saad Ehtisham says the nonprofit health system is looking beyond typical ROI benchmarks for determining worthwhile investments in AI and digital tools for operational growth.

KEY TAKEAWAYS

Atlantic Health views innovation as an organizational and cultural transformation effort rather than simply a technology initiative.

The system’s AI investments are focused on reducing friction across care delivery, including clinician documentation burden and patient scheduling delays.

CEO Saad Ehtisham sees workforce resilience and consumer access as long-term strategic returns, alongside traditional financial performance metrics.

For many health systems, innovation has become shorthand for digital expansion and AI deployment designed to create a return on investment. At Atlantic Health, president and CEO Saad Ehtisham frames that approach in another way.

“We’re looking at innovation much differently than most systems are and not as a tool, but as a cultural shift,” Ehtisham told HealthLeaders.

That philosophy is driving the New Jersey-based health system’s use of technology to improve workflows for clinicians while simplifying access for patients.

Investment, according to Ehtisham, is flowing into ambient listening tools, workflow automation, digital scheduling capabilities, and AI applications aimed at reducing friction across care delivery.

A Happier Workforce is a Better Workforce

One of Atlantic Health’s biggest strategic priorities involves workforce sustainability.

The system has emphasized upskilling employees and encouraging leaders to think beyond traditional operational silos, Ehtisham highlighted. The organization wants managers and staff members to develop enterprise-level understanding that allows them to grow internally rather than looking for opportunities outside the system.

“What we want to do is make sure our team members don’t stay in the vertical expertise that they’re framed in, but they have the ability to cross-train into a different vertical and be able to grow in their acumen,” Ehtisham said.

Technology investments have become integral to that workforce strategy.

Atlantic Health recently piloted ambient listening tools that document physician-patient conversations during appointments. While many organizations evaluate those platforms through productivity or revenue gains, Ehtisham is more interested in the impact on clinician experience and long-term sustainability.

“How does that make our clinicians’ and physicians’ lives a lot easier and their flow throughout the day?” Ehtisham said. “Does that reduce their pajama time where they can spend more time with their families instead of having to be in their computers?”

Atlantic Health is also exploring agentic AI capabilities that can respond to certain administrative patient questions through Epic’s MyChart platform. The goal is to reduce after-hours inbox management that contributes to physician burnout.

“It is increasing the resilience of our physicians and that will in turn increase their ability to want to practice longer and want to be with the system,” Ehtisham said. “So that’s our ROI. And I don’t think you can put a dollar value on that. You probably could, you get a mathematician, you can quantify that through some algorithm. I would rather not.”

That same mindset has influenced nursing operations.

Atlantic Health has deployed robots capable of retrieving supplies and handling tasks that frequently pull nurses away from bedside care, Ehtisham noted.

“Twenty-five percent of the time our nursing or any nurse in any health system is spending is non-patient facing,” he said.

By supplementing those activities through automation, the system can allow its team members to focus on taking care of the patient and performing at the top of their license.

As Ehtisham puts it, staff are more likely to produce 150% output if they’re working at 90% of their capability from a resource intensity standpoint, and happier in what they do.

Pictured: Saad Ehtisham, president and CEO, Atlantic Health.

Opening the Digital Front Door Wider

Atlantic Health’s innovation strategy extends into consumer access.

One of the earliest operational changes implemented under Ehtisham involved measuring the next available appointment within 30 days across clinics and reducing delays that prevented patients from getting timely care.

“That was one operational lever we pulled early on,” he said.

According to Ehtisham, improving appointment access generated gains in consumer experience while contributing to stronger financial performance.

“We’re beginning to see it from consumer experience,” he said. “They’re much happier being able to get in when they want to be seen.”

The system is now experimenting with on-demand self-scheduling capabilities designed to better connect patients with its ambulatory infrastructure.

Atlantic Health continues to expand outpatient locations anchored around primary care as well. Many of those sites include rotating specialty services, imaging, laboratory capabilities, and physical therapy offerings intended to create centralized outpatient destinations.

The organization’s digital ambitions also include patient-facing AI applications.

Ehtisham said Atlantic Health is looking at developing its own version of Claude or ChatGPT, capable of guiding consumers toward the appropriate level of care based on conversations occurring through the platform. He envisions systems eventually using those interactions to direct patients toward physician appointments or virtual visits while simultaneously transferring relevant information into the clinical workflow before the encounter begins.

“We know consumers are going on those platforms and typing in, ‘I have this, what should I be?’” Ehtisham said. “That’s a platform that’s being engineered by non-healthcare providers systems. We’d rather get into that technology.”

Keeping Financial Discipline in Focus

Even as Atlantic Health expands technology investments, Ehtisham acknowledged the tension many health systems face when balancing the pursuit of innovation with financial realities.

“Healthcare is the only place where you bring in technology, the cost goes up versus going down,” he said. “We’re trying to invert that thinking.”

That influences how Atlantic Health approaches vendor relationships and operational deployment. Ehtisham said the system prefers working more deeply with select partners capable of improving workflows end-to-end, rather than as a one-off.

He pointed to operational throughput as one example. The organization is evaluating how technology can reduce bottlenecks beginning in the emergency department and continuing through inpatient discharge processes. Smoother patient flow can improve experience while generating financial yield through shorter lengths of stay, Ehtisham stressed.

“It starts creating this pipeline of revenue streams and future predicted models that’s going to be coming through market share that you’re going to be gaining over time,” he said. “It doesn’t happen overnight. But you have to commit to what you’re trying to do.”

Innovation can’t happen without resourcing though, which is why Atlantic Health has dedicated annual capital dollars specifically toward technology investments tied to operational improvements.

“It’s more of a derivative,” Ehtisham said. “You’ve got to generate so much operating margin in order to invest in that,” creating a direct link between financial discipline and innovation capacity.