When Congress enacted the One Big Beautiful Bill Act (OBBBA) earlier this month, those of us in healthcare had no illusions about the ripple effects it would create. This legislation is unprecedented in many ways when it comes to Medicaid and ACA, and it will be shaping the future of healthcare as we know it.
For those of us who’ve spent our lives navigating the intersections of clinical care and operational excellence like we have, the questions are pressing:
- How will hospital systems, already stretched thin, manage the challenges ahead?
- What does this mean for the patients who rely on these systems for care?
- How can health systems move from merely surviving toward finding sustainable ways to thrive?
Below is our shared perspective on what’s ahead.
A growing financial strain
The cuts to Medicaid and ACA programs are the largest in U.S. history, with over a trillion dollars being shaved off funding over the next decade. According to the bill, health systems serving rural communities and low-income populations are expected to feel the most significant impact.
Rural hospitals often serve as the backbone of their communities, providing not just emergency services, but also acting as the primary care hub, the urgent care, and even in some cases, the only healthcare touchpoint for residents. The loss of Medicaid funding creates a dramatic shortfall that these hospitals can’t easily absorb.
For example, I [Susan] recently visited a health system in the Pacific Northwest, which operates critical access hospitals. These Medicaid cuts pose questions around sustainability, like how can facilities stay afloat while providing care to communities that have few, if any, other options? And the reality is, these hospitals don’t just save lives; they safeguard access and equity.
Additionally, as a former CDIO for a pediatric hospital in Texas, I know firsthand that Medicaid funding can account for 30–40% of their revenue. When those funds are reduced significantly, the result isn’t just fewer resources; it’s fewer clinicians, diminished quality, and bottlenecks in patient care.
Operational challenges in an already stressed industry
As clinicians, we’re both fully aware how much this legislation will strain already overburdened systems. Workforce shortages remain a top challenge across healthcare; add to that the anticipated strain from the influx of uninsured individuals who will turn to emergency departments as their last resort—and the cost pressures escalate. Emergency rooms, which are already stretched, could face unmanageable wait times. This increase in patient volumes may lead to heightened tensions and stress, impacting the safety and well-being of both patients and staff.
Beyond staffing, there’s the question of operational processes. Many health systems still rely on manually intensive methods to manage administrative workflows. Take something as basic, yet important, as Medicaid eligibility verification. With OBBBA’s new requirement for more frequent income checks, health plans and providers alike will see their administrative burden rise.
And then there’s the issue of payer-provider dynamics. For organizations that serve both roles, the cuts are akin to a “double whammy.” These integrated systems will need to adapt on both sides of the spectrum—how they deliver care and how they fund that care.
The role of technology and data
Despite its challenges, OBBBA also presents an opportunity. It forces health systems to rethink how they operate, from reengineering workflows to adopting innovative technology.
This is where both of us see technology, particularly AI, stepping in as a critical tool but we’re cautious about calling it a magic bullet. AI has significant potential to improve efficiency by automating repetitive tasks and predicting care needs based on historical and real-time data. For example, AI-powered solutions could analyze staffing patterns and patient volumes to optimize nurse scheduling, ensuring the right resources are available when and where they’re needed most.
Yet, AI isn’t a standalone solution. Putting AI on broken processes won’t fix the fundamental inefficiencies in healthcare. Good data and streamlined workflows are prerequisites for AI to succeed. Without them, health systems risk automating inefficiencies and wasting even more time and money.
For health systems to truly benefit from emerging technologies, we believe that leaders must take a hard look at their existing workflows, data quality, and organizational priorities. AI is an enabler, but only in tandem with operational clarity and well-oiled processes.
Another key dimension of leveraging technology successfully is communicating the potential ROI in a tangible way that resonates with both system leadership and frontline staff. Simply adding tools isn’t enough. Demonstrate, step-by-step, how the tool will improve care quality, save resources, and/or make clinicians’ jobs easier. Ideally, the frontline should be involved in evaluating and selecting technology that directly impacts their workflows.
Where the industry is heading
Waiting to react to the consequences of the OBBBA isn’t a viable option for healthcare systems. Leaders must evaluate their current data literacy, understand their gaps, and align workflows with the market’s evolving demands.
An important takeaway is that it’s not just about adopting new technologies, it’s about building the internal expertise to leverage them. The future of decision-making in healthcare depends heavily on a workforce that understands how to interpret and act on complex datasets, as well as how to embed AI strategically, rather than treating it as an afterthought.
It’s also essential that organizations don’t lose sight of their humanity amidst operational pressures, as the caregivers will bear the brunt of these changes. Burnout, stress, and moral injury are unfortunate realities that the OBBBA will exacerbate.
To combat this, health systems must identify operational efficiencies that genuinely relieve stress rather than add to it. Whether through better workload distribution, smarter scheduling, or improved role alignment, the focus should be on creating a sustainable environment for clinicians.
Final thoughts
The One Big Beautiful Bill Act is a defining moment for healthcare and one that will test the resilience and ingenuity of an industry already under immense pressure. While there are no easy answers, we believe that the future will be shaped by those systems that rise to this challenge with creativity, commitment, and a willingness to lean into change.
From advanced operational tools to care delivery innovations, every resource must be used thoughtfully and positioned to create real, meaningful impact where it’s needed most. It’s not just about weathering the changes; it’s about reimagining what’s possible so we can create systems that work better, both now and in the long run.
No hospital or health system can do this alone. Collaboration between healthcare organizations and the technology industry is critical to finding workable solutions for challenges of this magnitude. The stakes couldn’t be higher, and the urgency couldn’t be clearer. It’s up to all of us in healthcare to rise to the occasion.
