The Buzz This Week
As 2025 comes to a close, many forces have converged to reshape the daily realities of health systems within an exceptionally uncertain environment. This week, we reflect on five of the most persistent themes this year.
1. Artificial intelligence (AI) investment soared and use rapidly accelerated from concept to concrete programs across clinical and operational workflows.
Healthcare AI spending reached nearly $1.4 billion in 2025 as healthcare organizations adopted AI more than twice as fast as the broader economy. In Chartis’ 2025 Digital Transformation Survey, 9 in 10 health system executives said they are prioritizing AI capabilities over the next 5 years, and about half are already piloting AI-enabled tools such as clinical decision support and triage.
Capital flows tell a similar story. In the first half of 2025, US digital health companies raised about $6.4 billion across roughly 245 deals. AI-enabled firms captured close to 62% of that funding, with larger average deal sizes than non-AI peers. For the first time, AI-led companies accounted for the majority of digital health venture funding.
2. On the policy front, the One Big Beautiful Bill Act (OBBBA), government shutdown, and several other high-profile moves dominated headlines.
Representing the largest single defunding of federal health programs in history, the OBBBA (or HR1) is expected to increase uninsured rates, drive up uncompensated care, and shift payer mix toward higher financial risk.
Other OBBBA provisions affect reimbursement, research funding, access to capital, and operating flexibility. Safety-net and rural hospitals with high Medicaid share, academic health systems reliant on grants, and organizations already operating on thin margins are particularly exposed. Federal and state rural funds create some countervailing opportunities but also add complexity and uncertainty around timing and requirements.
Failing to gain an extension from Congress, enhanced ACA marketplace subsidies are scheduled to expire after 2025. Health system leaders are watching for changes in coverage and uncompensated care levels on top of the OBBBA’s federal funding reductions.
All of this played out in a year that also included a lengthy government shutdown; repeated standoffs over National Institutes of Health (NIH) and public health funding; and policy debates over Make America Health Again (MAHA) and the role of public health agencies. Together, these developments reinforced how unsettled the federal policy environment has been in 2025.
3. Operational and financial challenges mount.
Health systems face ongoing margin compression due to rising operating costs, inflation, reimbursement headwinds, and shifting payer dynamics. Expenses for labor, specialty drugs, and supplies continued to grow. Tariffs and other rapid policy changes added another level of uncertainty to the mix, even as organizations sought to stabilize operations.
Recent analysis of regional health plans shows mounting financial pressures on payers as well. Against that backdrop, contract negotiations between plans and providers in many markets have become more contentious, with greater focus on unit prices and utilization. Employer-sponsored premiums also continued to climb in 2025, adding another layer of cost pressure for purchasers and reinforcing concerns about affordability across the system.
4. Workforce pressures persist amid evolving clinical care models.
Health systems continue to deal with staffing shortages, burnout, insufficient training and pipeline, wage pressure, and immigration constraints. About 40% of nurses say they plan to leave the profession within the next 5 years, and 31 of 35 physician specialties are facing shortages.
Those pressures are now intersecting with more tech-enabled staffing models and a continued shift away from traditional inpatient settings as care models evolve. Hybrid models that include ambient AI, virtual nursing, and remote monitoring are changing how work is organized, and the associated care team roles and requirements.
5. The state and regulatory environment is evolving to keep pace with myriad changes.
With rapid AI adoption, changes in federal funding, and rising costs and workforce challenges, regulators are revising standards for quality, data, and technology used in care delivery.
Nationally, The Joint Commission’s Accreditation 360 overhaul reduced prescriptive standards and placed greater emphasis on outcomes, data use, and continuous readiness for quality and safety.
Federal agencies increased scrutiny of how organizations use digital and AI-enabled tools. Recent guidance from the US Department of Health and Human Services' Office for Civil Rights on the use of AI emphasized that organizations must assess tools for bias, document how they are used in patient care, and ensure they do not result in discrimination.
At the state level, Medicaid programs continued to tighten eligibility and compliance expectations. A recent California lawsuit against a health system over AI-enabled recording tools underscored growing scrutiny of how health systems capture and use patient information.
Why It Matters
In 2025, health systems faced an exceptional level of uncertainty created by rapid adoption of AI and advanced technologies, seismic shifts in national and state level policy, major federal funding cuts, fluctuating regulatory guidance, and mounting financial and operational pressures.
This uncertainty has made strategic and operational planning difficult for health systems. Many are leaning into scenario and contingency planning. Some are proactively reevaluating their service portfolios and staffing and operational structures.
As AI capabilities and vendors became widespread, health systems aimed to use these tools to unlock significant savings and meaningfully reduce administrative burden. But many health systems report uneven results as they experiment and have not aligned adoption with strategic priorities. In an increasingly tight economic environment, health systems have a greater need to demonstrate measurable impact from these investments.
AI governance also came to the forefront. The new Accreditation 360 standards’ emphasis on continuous readiness and outcomes, combined with increased scrutiny from payers and regulators, raised expectations that health systems can explain where AI is used, what data it relies on, and how they are monitoring it over time.
For the healthcare workforce, AI and other digital tools are already changing how work gets done. Organizations that are incorporating virtual nurses and virtual sitters, ambient documentation, and remote monitoring are reporting early gains in burnout and turnover reduction, patient outcomes, efficiency, and savings. At the same time, tech-enabled staffing models are creating new needs for upskilling, training, and change management as clinicians and staff learn to work in a digitally forward environment.
Reflecting on 2025, a few questions stand out for leaders as they head into 2026:
- Exposure and opportunity: Do we have a clear, shared view of how the OBBBA and related policy changes, AI investments, workforce pressures, demographic shifts, and evolving clinical innovations/site-of-care models impact our markets and service lines? Where are we most exposed or best positioned to reshape care and margin?
- Focus of the AI portfolio: Where do we believe AI will most meaningfully relieve operational, financial, or workforce pressure in 2026, and how do we deploy it to realize those outcomes?
- Governance and readiness: Are our current structures for clinical, operational, legal, and compliance oversight sufficient to proactively manage the uncertainty and change to come??
- Mission and community: In an uncertain environment, how do we make decisions about funding, technology, and staffing to protect access, quality, equity, and community relationships?
Answers to these questions will be unique to each health system’s organization and market. But for all health systems, flexibility and managing through uncertainty will be paramount as many of the top stories from 2025 will continue to play out in the year ahead.
RELATED LINKS
2025: The State of AI in Healthcare
Healthcare AI Adoption is 2.2X Faster Than the Broader Economy
Changes to Medicaid, the ACA and other key provisions of the One Big Beautiful Bill Act
