What You Should Know: 

– The U.S. healthcare landscape is facing a transformative moment with the signing of H.R. 1, the “One Big Beautiful Bill Act” (OBBBA), into law on July 4. This landmark legislation introduces sweeping changes to Medicaid and Medicare, as well as Affordable Care Act (ACA) subsidies.

– According to Tamyra Porter, Managing Director of Regulatory Advisory Practice at Premier, these shifts present both significant challenges and a rare inflection point for healthcare leaders to innovate and shape the future of care delivery.

4 Key Strategies for Turning Disruption into Opportunity

The OBBBA includes substantial federal spending reductions: $793B in Medicaid cuts over a decade and $268 billion in reduced spending for ACA marketplace subsidies, totaling over $1T in cuts. These reductions are expected to increase the number of uninsured patients, while reductions in provider taxes will limit states’ ability to raise revenues for healthcare programs. This combination is projected to have significant financial consequences for hospitals, making resiliency planning crucial for success in this new environment. While the bill’s provisions will not take effect immediately (with earliest implementations in late 2026), healthcare providers are urged to prepare now.

1. Tackle Total Margin Management

Healthcare providers must take immediate, data-driven steps to model financial impact and identify levers for value-driven performance.

• Model Financial Impact: Begin by establishing revenue and reimbursement baselines, managing to Medicaid and Medicare margins. Model the delta in revenue/reimbursement under the bill’s provisions, especially Medicaid reductions, Medicare PAYGO cuts, and the changing payer mix. Further adjust models for potential patient volume shifts due to deferred or avoided care, increased emergency department utilization by uninsured populations, and declines in access to social supports and transportation.
• Control Total Cost of Care: Once scenario planning is complete, focus on leveraging data to identify and control the total cost of care. Utilize analytics (such as Premier’s cost management solutions) to pinpoint where avoidable utilization is likely to spike (by geography, patient segment, or clinical condition).
• Rethink Operations and Supply Chain: Rethink contracting, procurement, and supply chain operations to support resilience, affordability, and alignment with new care models. The end-to-end supply chain offers significant savings opportunities through standardization, participation in group purchasing organizations (GPOs), contract penetration, and strategic management of purchased services. Volume-based discounts from GPO contracts can disproportionately help smaller and rural organizations impacted by cuts. Automation and robotic process automation (RPA) can streamline operations, reducing manual intervention and increasing efficiency. Outsourcing select functions can also enhance efficiency and accelerate value. Value-based contracting ensures spending aligns with quality and measurable outcomes.
• Maximize Reimbursement: Leverage a top-tier quality technology suite to monitor, predict, and reduce avoidable readmissions and adverse events that carry reimbursement penalties, while proving higher quality and value. Advanced, artificial intelligence (AI)-enabled coding solutions can surface real-time opportunities to optimize and automate risk-based adjustment across Hierarchical Condition Categories (HCCs) for accurate reimbursement. Premier’s revenue cycle team is also prepared to educate and engage changing patient populations around financial planning to proactively mitigate payment disruptions.
• Drive Financial Stewardship: Deploy service line analytics for a holistic view of how products and medications impact the bottom line and contribute patient value. In the clinical decision support (CDS) space, look for cost attribution technology that defines low-value care and makes costs transparent in real time, helping providers create financial efficiencies and remove waste.

2. Speed the Move to Value-Based Care Arrangements

The OBBBA’s Medicaid and ACA cuts may lead to a higher share of uninsured and underinsured patients, meaning more care delivered with little or no fee-for-service (FFS) reimbursement. This makes value-based care (VBC) not just a choice, but a survival strategy to avoid financial losses in a restrictive payment landscape.

• Embrace Alternative Payment Models: These models reward care coordination, chronic disease management, and prevention—strategies that reduce costs and can mitigate financial losses from the OBBBA’s cuts. They also foster greater alignment with primary care and specialist physicians and incentivize social support structures to help uninsured or underinsured patients manage conditions and avoid expensive care settings.
• Assess Readiness: Health systems must conduct a clear assessment of their current contractual and operational capabilities for VBC. This includes understanding what portion of contracts tie payment to performance, their financial and operational readiness to take on risk, and which patient populations they are best positioned to manage. Providers should also explore how Section 1115 Medicaid waivers can facilitate innovative care delivery and payment reform.
• Invest in Infrastructure & Redesign Workflows: Transitioning to VBC requires investment in analytics tools, registries for chronic condition tracking, and embedded care coordination models that extend to partnering physician groups and other providers. This shift demands a redesign of clinical workflows, moving from episodic care to team-based, longitudinal models prioritizing prevention, care transitions, and virtual engagement. Internal incentives and payer contracts must align with these new priorities, including shared savings, bundled payments, or capitation.
• Learn from Pioneers: Those making the transition should consider data-driven collaborative models where they can learn from early pioneers succeeding in VBC arrangements.

3. Deploy Technology to Optimize

In today’s resource-constrained healthcare environment, advanced technology, particularly AI, is critical for transforming operations.

• Intelligent Automation: Embedding AI into everyday workflows can reduce the number of full-time equivalents (FTEs) needed for routine or repetitive tasks, such as supply chain tracking, revenue cycle management, clinical documentation, and care coordination.
• Actionable Insights: Leading solutions go beyond simple automation, with advanced analytics and AI-powered tools flagging process breakdowns, standardizing best practices, and surfacing actionable insights. Examples include workforce optimization tools for staff realignment and supply chain analytics for cost savings and variation reduction. In claims processing, AI not only accelerates throughput but also improves accuracy and reduces denials, directly impacting the bottom line.
• Benefits: The result is streamlined operations, smarter resource allocation, reduced costs, and more bandwidth for providers to focus on delivering quality care.

4. Pursue Public Health Engagement

Collaboration is rapidly becoming a financial imperative as health systems face pressure to improve outcomes with tighter margins.

• Address Duplication: Many health systems build and operate community-facing programs (e.g., maternal health, immunizations, home visits) that overlap with services from payers and local health departments (LHDs). This duplication is costly and inefficient.
• Leverage Partnerships: With public health programs facing budget cuts, they are more receptive to innovative partnerships with private sector organizations and non-profit healthcare to achieve shared goals. Health systems can leverage LHD resources, which are already embedded in communities and often deliver services at lower cost due to established infrastructure, public funding, and community trust. Pooling resources can extend reach, reduce overhead, and improve outcomes while boosting the bottom line.
• Impact on Value-Based Care: In VBC models, providers are often financially accountable for total cost of care. Partnering with LHDs and public/private payers to address upstream needs (immunization, prenatal care, chronic disease outreach) can reduce unnecessary ER visits and hospitalizations, boosting shared savings performance.
• Strategic Inventory: Provider leaders should conduct a system-wide inventory of community-facing programs to identify overlaps with LHDs or community-based organizations. This informs decisions on consolidation, co-investment, or shared service models for improved impact and financial sustainability.