Introduction

In Q2 2025, Advisory Board researchers spoke with more than 150 U.S. healthcare executives through one-on-one interviews and small-group forums. These leaders shared their experiences navigating political uncertainty, financial strain, and operational complexity. This report highlights key insights from those conversations.

At the start of each interaction, we asked leaders to give us one word to describe the current, ongoing conversations with their leadership teams. Leaders' responses fell into four categories: resilient, turbulent, purposeful, and passive. Keywords like focus, change, concern, and unprecedented reflect both the urgency and complexity leaders face today.

While select executives viewed the path ahead as an opportunity most leaders used language that reflected anxiety and uncertainty — suggesting limited agency to address the challenges ahead. The size of the word in the table represents the relative frequency that it was used by an executive.

Healthcare leaders are navigating a system under intense pressure from policy shifts, rising costs, and changing patient expectations. In our conversations, leaders described diverse strategies aligned with three recurring themes: boosting operational efficiency through streamlined workflows and technology; carefully balancing near-term financial pressures with long-term investments, and reassessing strategic direction to align services with mission and sustainability. Leaders can use these widely variable responses to benchmark their own strategies and find new ways to navigate current challenges.

Policy uncertainty exacerbates sustained market pressures

These conversations took place as Congress moved toward passing the One Big Beautiful Bill Act (OBBBA). Accordingly, our discussions centered on a unifying problem:

While the passage of OBBBA provides some clarity, executives emphasized that federal policy dynamics remain complex — and that these pressures are compounding existing challenges. Many executives pointed to an older, sicker population that requires more costly care and a payer mix that is shifting from commercial to public insurance. Meanwhile, administrative burdens continue to rise, and staffing shortages have strained capacity for behavioral health and long-term care — driving up recruitment, retention, and overtime costs.

This unstable business landscape left leaders wary of their ability to manage policy shifts across federal and state levels, reimbursement models, and administrative mandates. Key sources of policy disruption reviewed in these conversations included:

Executives were nearly unanimous in their concern about the severity of funding uncertainties — and the long-term consequences for their organizations and communities. Research funding cuts limit operations today, particularly for Academic Medical Centers (AMCs), and may set back future innovations. Cuts to Medicaid and ACA coverage prompted increased uncompensated care and expensive emergency department utilization — with secondary effects potentially impacting premiums and coverage affordability. Further trickledown effects related to the financial viability of community hospitals, and the subsequent impact on possibly overwhelmed secondary and tertiary centers, challenging care coordination and straining operational capacity.

Leaders indicated that the recent pace and unpredictability of federal and state policy changes have created roadblocks for long-term planning. States themselves are also delaying some decisions while awaiting federal clarity, further leaving providers in limbo. Accordingly, organizations are grappling with how to prepare for the future, with some waiting for policy certainty before committing to any new plans, and other organizations narrowing their focus to three to six-month scenario planning cycles, while others are trying a longer view — beyond a decade — past the uncertainty of the moment.

But all leaders agreed:

Top 3 priorities for leaders right now

Across our interviews and executive forums, we engaged with leaders from varied organization types — regional health systems, suppliers, safety net providers, health plans, AMCs. Leaders consistently described themselves as “focused” on the challenges ahead, and just as consistently, noted how external pressures and policy disruptions complicate planning for the future.

Despite these challenges, leaders consistently highlighted three priorities:

Though our conversations with healthcare leaders centered on navigating today’s challenges, several leaders also looked ahead. Across the forums, they acknowledged that while the system is strained, the path to future healthcare reform requires more than just defense, it demands ownership. Impactful transformation won’t happen unless providers can move beyond the defensive "don’t hurt us" mindset, where stakeholders act to protect the policy levers that have a net benefit to their organizations, but those same levers are not efficient for the community ecosystem overall (and would not be a part of an effective, rational system designed from scratch). Those are the parts that respective stakeholders must collectively recognize as areas that they can "give up" in exchange for overall improvements to the broader healthcare system.

To begin such an enormous shift from the industry’s historical posture, leaders noted that they will need to lay the groundwork now for evidence-based reform later. If healthcare stakeholders continue to raise alarms about every proposed policy without tracking and substantiating the real-world consequences, they risk being dismissed as alarmist. To avoid this, leaders must begin systematically tracking the effects of policy changes, starting now. By tying measurable outcomes to specific legislative actions, the industry can build a compelling, data-driven case for reform that resonates with both lawmakers and the public. Reform depends on various stakeholders recognizing their positions of vulnerability, aligning around common goals, and investing in the data and partnerships needed to advocate effectively for change.

And for the landscape of the immediate future, leaders are recognizing the interconnectedness of all players in the healthcare ecosystem: the providers, payers, patients, policymakers, and communities. While some continue to advocate independently, others are looking to form cross-sector coalitions to amplify shared priorities and protect systemic resilience. As one attendee noted: