At the American Hospital Association (AHA) Leadership Summit in July, executives from around the country met for three days to discuss the future of healthcare and how leaders can stay adaptable and accountable in these changing times. The timing aligned with the recent passage of H.R.1, allowing leaders to discuss the bill’s impact, share initial reactions, and explore potential responses in real time.
The themes below emerged from this year’s conversations, exhibit hall interactions, presentations, and keynote speakers.
1. Initial Reactions on the Impact of H.R.1
The recent passing of H.R.1 (also known as the Big Beautiful Bill) was a significant topic over the course of event. There was consensus that health systems will prevail and maintain their status as community anchors, but tough decisions are ahead. For community health systems that rely heavily on Medicaid, health system leaders recommended that the systems themselves need to take the lead, providing Medicaid patients with resources or guidance for maintaining their enrollment in Medicaid and access to services.
ECG’s Perspective: Providers will face financial strain and tough service decisions, but a broad, systematic collapse is unlikely. The healthcare system has weathered major shifts before (e.g., covid) and will adapt again. This resilience needs to be coupled with bold strategy (versus incremental improvement or status quo).
2. Deploying Innovative AI
Not surprisingly, artificial intelligence (AI) was a widely discussed topic. A few systems highlighted innovative models they have developed internally, but most systems are looking for the most innovative and seamless tech to deploy into their operations. The broad consensus at the conference is that AI will not replace providers, but those who adopt the latest and best AI tools will thrive.
ECG’s Perspective: Democratizing data-supported knowledge through AI requires a structured, stakeholder‑centric approach.
- Begin by clearly defining the problem at hand, rather than retrofitting AI to solve nonexistent challenges.
- Establish meaningful KPIs—such usability and explainability—that align with stakeholder needs.
- Implement a robust, cross‑functional governance model to maintain oversight and accountability.
Many systems stress that bringing key user stakeholders into the process during the design increases the trust and applicability of the technology in the clinical environment. AI must be integrated into the workflow to ensure that additional demands do not further complicate the workload burden of the end user. Finally, focus on and reward continuous improvement rather than reaching a static goal.
3. Supply Chain Disruptions
Disruptions in the supply chain continue to plague health systems. Health system leaders at the conference felt that a level of nimbleness is required with data and proactive planning. But this requires a sophisticated understanding of the supply chain process across all major streams.
ECG’s Perspective: Given the uncertainty and continued disruptions in the supply chain, proactive planning is essential. Notable tactics include:
- Diversifying the supplier base with less focus on highly committed contracts.
- Strategic stockpiling, which can mitigate shortages but requires an understanding of upstream potential source constraints and centralized control of distribution.
- Creating data tools that can conduct real-time demand planning and identify possible vulnerabilities.
4. Clinical Care Redesign
Health system leaders highlighted that physician and clinician decision-making remains central to healthcare delivery. The consensus across conference attendees is that success in redesigning clinical care for predictable, cost-effective, value-based outcomes hinges on active physician collaboration, trust, and shared accountability.
ECG’s Perspective: Systems that retain and keep the best doctors will have the greatest success in their markets. It is critical to involve physicians in design, testing, training, and leadership roles that foster trust and smoother change management. Transformation initiatives fail when physician groups are disengaged, and systems should look to deploy effective models for collaboration, including:
- Dyad leadership structures.
- Shared ownership of redesign initiatives.
- Governance for streamlined decision-making.
- Physician-led peer influence forums.
- Systems around physician-defined performance metrics.
Key success factors include transparent, real-time data, such as monthly value reports, board-level KPIs (e.g., expense, variation, outcomes), and department-level goals.
5. Behavioral Health
Many health systems have rapidly scaled up behavioral health service lines within the past few years and are now reevaluating the footprint they have built to ensure it is optimized for the future. With increased focus on social drivers of health and the epidemic of loneliness, systems are seeing increased utilization that has created access challenges, exacerbated by workforce shortages and margin pressures.
ECG Perspective: Maximizing behavioral health ROI requires optimizing payer reimbursement, fine-tuning staffing, creating efficient transitions across the continuum of care, and partnering strategically with community providers and third-party operators. Key behavioral health initiatives that successful systems are taking include developing a focused strategic plan that enables service lines to articulate a clear mission that drives all operating decisions, calculating behavioral health margins in relation to downstream impact, and improving access to services based on point of entry.
6. Community Health
The conference highlighted the importance of building public trust in community healthcare while addressing both emerging and critical public health issues. Health system leaders highlighted key work related to accountability, quality improvement, community benefit, and patient engagement. This included not only advances in the care model to increase capacity and improve access management but also finding financially viable ways to address community health needs.
ECG’s Perspective: The recent H.R.1 legislation is making it difficult for health systems to maintain community programs, and system leaders realize they may not be able to offer all services. To sustain the level of service that is expected by the community, systems should:
- Seek out community partnerships to augment gaps.
- Pursue value-based care initiatives that reward high-quality care.
- Actively address nonmedical drivers of health.
- Deliver age-friendly care.
- Develop sustainable solutions to improve care delivery.
7. Retail/Specialty Pharmacy and 340B
With the legislative changes outlined in H.R.1 reducing Medicaid coverage, potential ramifications for the 340B program and additional increases to pharmaceutical expenses were hot topics. With the proposed cuts to the Medicaid program, many conference attendees are concerned that hospitals currently reliant on 340B discounts to care for their patients will lose access to the program should the Medicaid population be reduced too dramatically. There remains a great deal of uncertainty about the precise impacts.
Additionally, health system leaders continued to promote retail and specialty pharmacy revenue capture as an increasingly vital part of financial survival. Internal “fill rate,” a figure that measures the percentage of prescriptions filled at internally owned and operated pharmacies versus those that leave the organization due to PBM/insurance restrictions or patient preference, has become a KPI tracked daily due to the impact those figures have on net revenue. One organization reported that capturing just 50% of their prescriptions drove $26 million in net revenue annually for their operation. Health system leaders urged organizations that had not yet made this a priority to examine the opportunity in the near future.
ECG’s Perspective: There are efforts in the industry to lower drug prices through increased competition and price disclosures. This could lead to margin compression for hospitals/pharmacies and an opportunity to optimize 340B and pharmacy strategies. It is important to begin modeling the impact on the system and the overall financial effect. Revenue capture at the pharmacy is meaningful to the margin, and prioritizing these efforts against the growing set of priorities at the system level will be necessary.
