Latest / Becker’s Healthcare Podcast / Healthcare Outlook for 2026: Policy, Consolidation, and Cautious Optimism

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Healthcare Outlook for 2026: Policy, Consolidation, and Cautious Optimism · Becker’s Healthcare Podcast

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  This is Scott Becker with the Beckers HealthCare
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  podcast.
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  We're thrilled today to be joined by long
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  term leader
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  and editor in chief Laura Dierda. Laura joins
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  us regularly to talk to us about
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  issues that she's watching in health care.
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  Laura, let me tee it up and ask
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  you to take it away. What are the
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  couple of the key issues that you're watching
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  and stories that you're watching currently in health
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  care as we head into the last couple
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  weeks of 2025?
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  Absolutely. Well, thank you so much, Scott, and
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  what a year it's been in 2025. There's
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  been so much that happened in the health
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  care space and really seeing a lot of
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  different trends, whether it's looking at technology and
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  the acceleration of artificial intelligence,
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  looking at how the workforce has developed,
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  as a result of that as well as
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  other key factors and pressures within the environment.
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  And then, you know, too, thinking about all
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  the policy changes, there's a lot coming up
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  in 2026
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  and 2027 that executives are really keeping an
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  eye out for, whether it's thinking about CMS,
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  Medicaid, other health care funding issues. And then,
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  two, thinking about consolidation
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  and just any other policies,
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  tariffs, and more that could make an impact.
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  So, you know, in that, we've been trying
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  to look at how different
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  organizations are thinking about next year and ask
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  leaders how they're planning for the next year,
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  given all the uncertainties in the field and
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  really, you know, being up against a lot.
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  So,
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  we actually had a report recently from Fitch
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  ratings that, might have been a little bit
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  rosier than usual given some of the challenges,
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  but Fitch issued a neutral outlook for The
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  US health care provider sector in 2026,
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  really pointing to
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  stable credit trends, modest revenue growth, and potential
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  margin pressure from some of those rising labor
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  costs and policy shifts as we talked about.
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  The the rating really cited,
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  issuer resilience and sector stability.
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  Most credit ratings are expected to remain balanced
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  for the next twelve months for hospital and
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  systems. Now, of course, that could vary based
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  on region where the hospital is located, its
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  size, etcetera. But, overall, you know, many organizations,
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  while not necessarily in the growth mode they
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  would like to be, still are likely gonna
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  be in a decent position for the next
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  year or so. Fitch expects revenue to grow
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  modestly, projecting about mid single digit revenue growth
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  in 2026
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  driven by low single digit increases in volumes
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  as well as low to mid single digit
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  mix adjusted reimbursement gains according to their report.
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  The merger and acquisition activity is also expected
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  to be on the rise as consolidation continues
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  in the health care space. I think there's
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  been a lot of folks who have taken
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  the last six months or so to see
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  what would happen with some
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  of the policy and legislation updates. There's a
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  lot in the beginning of the year that
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  leaders were facing. And so to think about
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  how you know, what that means for them,
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  see ground settle a little bit, and figure
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  out what their plan is gonna be for
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  the next twelve months. Many of them are
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  starting to think through, hey. Maybe it's time
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  to either,
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  start adding health systems again, doing a little
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  bit more buying, or on the flip side,
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  you know, taking on a partner that could
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  help,
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  smaller or regional
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  organizations
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  really grow in in the way they want
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  to in the future. So,
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  we expect to see a bit more of
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  that,
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  the consolidation
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  continuing.
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  We also see that Medicaid changes may increase
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  the uninsured population.
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  The 2025 tax cut and jobs act will
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  tighten Medicaid
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  eligibility,
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  intensify
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  annual redeterminations
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  in the next year, so that would likely
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  reduce Medicaid enrollment.
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  So, Fitch expects this to push people into
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  more of the uninsured population and affect hospital
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  payer mix, ultimately placing more pressure on overall
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  margins.
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  As we've seen, you know, executives have this
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  top of mind that they're planning for next
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  year as well as additional cuts that would
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  happen in 2027
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  and already thinking through how they can add
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  additional revenue streams, looking at ways they can,
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  boost philanthropy efforts, figuring out how they can
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  become more efficient, although there's only so much
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  you can squeeze out of hospital health system
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  enterprises. So, you know, really thinking through how
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  they can put themselves in the best position
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  with this next twelve months to absorb any
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  additional
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  hits that might be coming or, an up
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  swing in that uninsured
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  population.
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  And then finally, the policy shifts that we've
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  seen recently from CMS thinking about the, twenty
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  twenty six outpatient prospective payment system,
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  rule
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  cut reimbursement
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  for drug administration for some of the off
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  campus hospital outpatient departments as well as, you
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  know, really had more of a a balance
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  for,
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  some of those reimbursement
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  to hospital outpatient departments versus ASCs versus
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  what's inpatient. And so we really see this
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  pushing
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  more patients into the ASC setting and more
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  hospitals and systems trying to,
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  strengthen their ASC strategies sooner rather than later,
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  whether that's through partnerships, developing their own surgery
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  centers, or a mix of those things to
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  make sure they're getting their patients into the
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  right place and still capturing
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  some of those procedures as they come through.
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  So those are some of the big things
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  that we're seeing for the next twelve months
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  or so, and and really a lot happening
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  within the health care space, but definitely, you
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  know, cautious optimism that there is going to
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  be a little bit more stability in the
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  next year than some folks perhaps felt in
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  2025.
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  Laura, when you hear the rating agencies be
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  a little bit more positive about next year,
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  what is the tone you're actually hearing from
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  health systems and health system executives?
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  Are they feeling that as well, or what's
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  the sense that you get from talking
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  to, you know, systems and and and leaders?
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  Absolutely. So the sense I get from talking
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  to systems and leaders is that, really, the
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  next twelve months are are gonna be filled
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  with some tough decisions that they're gonna have
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  to make in looking ahead towards the future.
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  And so I think there is a little
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  bit more
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  strain or,
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  a little bit more hesitancy to really think
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  about the positive because there are so many
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  challenges. I I think many
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  systems are facing,
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  some big decisions, whether it looks at playoffs
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  or workforce reductions,
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  or
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  trying to figure out how they're going to
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  manage all of these shifting priorities,
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  in bringing folks into
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  the technological and digital age. I think it's
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  no easy task, and, you know, really, many
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  systems have have seen additional pressures coming in
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  on the financial side this year. And so
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  I do think there is
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  it's been more challenging to be optimistic about
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  next year. I think there is still a
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  lot of,
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  stress around how they're gonna make the balance
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  sheets fit. But, ultimately,
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  you know, from many of the especially CEOs
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  and CFOs, when I talk to them, they're
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  very clear eyed about what they're going to
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  need to do. And so I think they
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  are have been hard at work in in
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  getting the strategy and messaging down and then
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  really, you know,
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  pushing past some of those tough decisions to
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  actually come off the other end and seeing
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  health care becoming more
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  accessible,
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  becoming more, you know, delivering better quality care,
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  being able to tackle some of the big
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  community based issues that they've wanted to do.
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  I I think they see a pathway to
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  it, but there are certainly
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  challenges ahead before they get to that spot.
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  And so it's definitely
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  mixed, but there is hopeful optimism because we
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  do have
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  more possibilities and potential of more people thinking
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  about mental health and behavioral health, more organizations,
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  you know, stepping up to support hospitals and
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  systems and especially academic and research institutions in
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  some ways. But it's gonna be very different
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  and and very challenging to get to that
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  new and and transformative space in health care.
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  So I think on the ground,
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  a lot of still
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  stress and and heartache over that. But in
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  the end, I think the leaders, you know,
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  that I've been speaking to still do have
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  a
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  a positive outlook on what health care could
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  and should be for their communities and are
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  are very much committed to serving,
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  their patient population and figuring out how they
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  can
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  make this work. I think many of them,
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  you know, look at the challenge as an
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  opportunity to do things better, but very, very
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  clear eyed on, you know, some of the
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  tough decisions they're gonna have to make in
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  the next twelve months.
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  It does seem like we hear more of
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  a tone of cautious to cautiously optimistic
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  versus pessimistic,
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  which I think at some points during the
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  year or early in the year, it almost
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  felt more pessimistic.
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  And so, hopefully, it continues to move just
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  a little bit.
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  That meter of confidence continues to move a
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  little bit in the right direction.
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  Absolutely. Agreed.
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  Laura, I wanna thank you as always for
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  joining us on the Becker's Healthcare podcast.
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  For people that don't know Laura Derrida, she's
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  been with Becker's Healthcare for more than a
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  decade
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  and just an absolutely remarkable leader, just the
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  very best of the best. Laura, thank you
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  so much for joining us today at Becker's
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  Healthcare on the Becker's Healthcare podcast and more
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  importantly for your overall contribution to everything that
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  Becker's Healthcare does. Oh, thank you so much,
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  Scott. I appreciate it. It's been an amazing
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  decade plus and just, you know, really excited
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  to see where things are headed.
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  Thank you very, very much.