Financial challenges are not new to healthcare. A perfect storm of converging trends has left many organizations operating within razor-thin margins in recent years.
For safety-net providers, the latest financial uncertainties introduced by the One Big Beautiful Bill Act present yet another hurdle. Many financial executives may fear making the wrong move and choose to “freeze” in response to Medicaid funding cuts that will equate to nearly $800 million.
Yet inaction is likely the worst response to ensuring a sustainable and healthy future for both healthcare organizations and the communities they serve. For vulnerable populations who often face a host of chronic conditions and socioeconomic challenges, proactive management of health becomes even more critical to minimize the need for higher-cost interventions.
Now is the time for healthcare leaders to embrace innovation and assure coming challenges become opportunities. Deploying the right technology and infrastructure—those that address the nuances of working with Medicaid, Medicare and other value-based arrangements—can help safety-net providers cut through the noise and proactively address financial and clinical outcomes, patient engagement and access to care.
Maintaining Margin
Hospital revenue fallout associated with Medicaid cuts is expected to be substantial in 2026, reaching as high as $32 billion. It’s understandable why leaders are bracing for impact and why forward-thinking financial executives will immediately shift focus to strategies that help ensure maintenance of as much financial margin as possible.
For example, healthcare organizations need to begin rolling out processes now to address redetermination requirements in 2027. Because those who continue to qualify for Medicaid will need to re-enroll twice each year, providers must proactively address potential gaps in benefits for the patients they serve.
This requires a level of visibility into patient data that resource-strapped safety-net providers will not be able to achieve through manual processes alone. Providers and health plans can find this kind of automation in advanced population health platforms that integrate with EHRs and support data sharing between providers and payers. This kind of technology-enabled collaboration paints a more complete patient picture that can drive informed, proactive outreach.
It can also provide visibility into redetermination needs to ensure Medicaid patients follow through with reenrollment—making the business case for investing in this kind of automation an easy one since loss of Medicaid patients can equate to $600,000 lost annually.
In addition to automated identification and outreach, technology that supports patient visit planning can help care team members identify Medicaid patients needing to reenroll in the moment. These tools draw from multiple data sources including EHR data, payer attribution data and health information exchanges (HIEs) to help care teams plan and prioritize all that needs to be addressed during scheduled patient encounters.
Optimize Quality Outcomes for a Healthy Bottom Line
Loss of Medicaid patients, which could be up to 23% during redetermination, also means safety-net providers will need to diversify their patient populations to maintain healthy operating margins. The industry will continue to see further expansion of value-based arrangements and reliance on managed care plans that require proactive management of conditions and necessitate greater payer-provider collaboration.
Consequently, care teams need access to the right information, in the right place, at the right time to successfully close gaps in care. Annual Wellness Visits (AWVs) are a great example. Within a value-based arrangement, AWVs are low-hanging fruit that safety-net providers should capitalize on. Yet proactive outreach that ensures members take advantage of this preventive service requires the support of advanced data analytics and personalized communication strategies.
The right population health platform can aggregate the needed data from multiple sources and enable providers to automatically send targeted SMS messages to appropriate patients reminding them of their AWV benefit. The opportunities for using an automated patient outreach tool to close care caps are seemingly endless, extending to a host of preventive screenings, vaccines and appointment follow-through.
In similar fashion to ensuring redetermination follow-through, patient visit planning equips care team members with the information needed to ensure preventive care happens when the patient is in front of them. If a patient with diabetes needs an A1C test or a 55-year-old male is due for a colonoscopy, that information is readily available for care teams and physicians to act on during the schedule appointment.
Embracing Innovation in the Face of Funding Uncertainty
Sweeping changes are expected for Medicaid, and forward-thinking safety-net providers are preparing now for the financial impact. Healthcare leaders must identify and embrace innovation that can unify clinical, payer, HIE, and social drivers of health (SDOH) data to deliver a complete picture of patient health and risk factors. Then care teams can identify appropriate interventions and proactively reach out to patients, closing critical care gaps such as Medicaid redetermination while also lowering costs and utilization. The right combination of technology and infrastructure can deliver significant patient engagement ROI, ultimately turning the current Medicaid challenge into an opportunity that leads to healthier communities.
About Jeff Brandes
Jeff Brandes is President and CEO of Azara Healthcare, a company focused on providing Population Health, Reporting and Analytics to Community Health Centers, Primary Care Associations and other networks and organizations representing safety net care providers. Jeff led the formation of Azara in 2011 and has worked extensively with Community Health leadership across the country with the goal of increasing the use of Data and Analytics for both care quality improvement and cost management.
