Becker's Hospital Review

12 CEO / STRATEGY Health system C-suites embrace ambiguity By Laura Dyrda A merica's hospitals are entering a defining moment. e next five years will test not only the financial resilience of health systems but also their capacity to transform — fast. As federal funding tightens, Medicaid evolves, and traditional fee-for- service models show their limits, leaders face a stark choice: adapt with discipline and agility, or risk falling behind. "To thrive in the next five years, health system leaders will need greater rigor and discipline in strategic planning, paired with the agility to adapt quickly as federal funding cuts and Medicaid changes reshape the landscape," said Erik Mikaitis, MD, CEO Of Cook County Health in Chicago. "We must get even more comfortable with ambiguity as uncertainty prevails." Traditional fee for service models and operating in isolation isn't sustainable anymore, said Dr. Mikaitis. Slim margins have become the "new normal" in healthcare aer the COVID-19 pandemic for nonprofit health systems, and smaller hospitals are seeing even more of a pinch. Hospital operating margins increased 2% in August year over year, with the average year-to-date margin hitting 1.9%, according to Kaufman Hall's National Hospital Flash Report. "Success will depend on building strong partnerships to share resources, data and innovative solutions, both within and outside of the healthcare ecosystem," said Dr. Mikaitis. "As pressures mount, provider organizations must double down on cultural discipline, ensuring that teams not only understand the strategic direction but are equipped and motivated to execute on it." Value-based care is a familiar concept but most health systems haven't embraced it. Hospitals may have value-based contracts through Medicare or accountable care organizations, but their strategy and balance sheet is based on fee-for-service contracts. As healthcare experiences more pressure to lower costs and provide care outpatient, hospitals that don't transform will be le behind. "e focus must shi decisively from volume to value, measuring success by outcomes achieved rather than services delivered," said Dr. Mikaitis. "While some systems are well on their way, others, including safety nets of our nation's healthcare system, are more challenged in adopting these models. A high tide lis all boats. I envision large scale partnerships to elevate value-based care models across all providers to improve not only individual and population health, but also the quality and cost effectiveness of U.S. healthcare across the board." John Mallia, interim system CFO at Memphis, Tenn.-based Methodist Le Bonheur Healthcare, sees a similar need for greater financial discipline, policy stability and payer alignment for hospital C-suites. e move to more value-based contracts supports this growth. "[C-suites] need clearer reimbursement frameworks that reward access and outcomes, reliable capital and workforce pipelines, and technology that delivers measurable productivity gains," he said. "Simply put, we recognize that change is a constant so we will rely on organizational agility and sustained investment in care delivery to continue to fulfill our mission in this dynamic healthcare environment." Health system executives see further collaboration with payers as important to value-based care and future growth, but current market dynamics have strained the relationship between some health systems and payers. While expense increased double-digits over the last two years, the reimbursement rate hasn't kept up and now some health systems are dropping certain payers from in-network contracts as a result. What can C-suite leaders do to bridge the gap? "In a time of financial strain and growing public skepticism, accountability and transparency must begin in the C-suite and extend across the entire healthcare ecosystem," said Patrick O'Shaughnessy, DO, president and CEO of Catholic Health, Long Island. "Accountability isn't just a metric, it's a leadership mindset rooted in humility, purpose and mission. Hospitals, payers and policymakers must work together to ensure care is accessible, equitable and sustainable. When every stakeholder holds themselves to that standard, we move from finger-pointing to meaningful progress in solving the challenges facing our industry." n Hospital CEO exits up nearly 12% year over year: 4 things to know By Kelly Gooch H ospitals reported 95 CEO exits from January through September 2025 — a nearly 12% increase from 85 recorded during the same period in 2024. The finding is from executive coaching firm Challenger, Gray & Christmas' Nov. 4 report examining CEO turnovers in the U.S. Four things to know: 1. Ten of the 95 CEO exits that hospitals reported through September 2025 occurred in September. 2. Across 29 industries and sectors, 1,650 CEOs departed through September in 2025, down from 1,652 in the same period last year. 3. In September 2025, specifically, 146 CEO exits were reported across industries — the same as the month prior. 4. In healthcare, Becker's has reported at least 185 hospital and health system CEO exits since Jan. 2, including retirements and resignations. n

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