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Setting the course to better healthcare: AI, consumerism, and trust-based alliances

2026 health system outlook

Jan 14, 2026

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Healthcare is undergoing a technology-driven transformation. It holds the promise of a new ecosystem of care that will enable better outcomes, more personalization, and long-term financial sustainability.

Yet the industry’s chronic ailments of access and affordability are likely to get worse before they get better as healthcare organizations are forced to make hard choices to offset expected revenue losses in the near term while also making strategic capital investments.

Health systems and health plans’ topline revenue will feel the impact of planned Medicaid funding cuts, Affordable Care Act (ACA) subsidy expiration, employer pressures to manage premium revenues, and Centers for Medicare & Medicaid Services (CMS) inpatient-only and other rule changes. These pressures are on top of rising costs driven by population aging, new drugs and biopharmaceutical innovation, labor constraints, and tariffs.

Against these challenges, many leaders are expecting artificial intelligence (AI) and other advanced digital tools to meaningfully improve access and affordability by augmenting humans and automating low-value tasks. The recent launch of enterprise AI systems (e.g. Open AI for Healthcare, Claude for Healthcare by Anthropic) signals the next step in AI’s push toward greater efficiency and accessibility.

However, the investment is expensive, and the outcomes remain to be seen: How will these changes take hold, what measurable benefits will they generate, when, and for whom? One thing that is clear to these healthcare leaders is that transformation needs to be driven from the inside out to make the greatest sustainable impact.

In this perspective, we focus on how healthcare providers can drive meaningful change through strategic, human-centered, and digitally forward approaches.

Health systems that orient change around three core domains will set the course to better healthcare

In this new stage of technology-driven evolution, healthcare leaders can fundamentally address the challenges of access and affordability. But only if the change is both technology-powered and human-elevated.

Healthcare’s technological journey to date has driven tremendous progress in the digitization of information and treatment advancements, but it has done little to bend the cost curve. And in many situations, it has depersonalized the caregiver and patient experience (just picture the physician facing the computer screen instead of the patient).

Now, in this next stage of technology-driven change, we’re seeing early bright spots that enhance human connection. Health systems are deploying more personalized, empathetic technology to shape consumer, provider, and workforce engagement. They’re harnessing real-time information to drive predictive action. And they’re using automation to reduce the administrative burden related to navigating, delivering, and financing care—to the benefit of costs, workforce, and patient experience.

In the work ahead, we believe health systems should orient around the following domains:

1. Harness technology to orchestrate care across a multimodal network

2. Move consumerism beyond a buzzword toward technology-powered personalization

3. Build trust and forge alliances to create solutions

The path ahead for academic health enterprises is uncertain. While the scale of lost revenue varies by institution, all academic health enterprise leaders will need the support of faculty, staff, and the community to effectively navigate the challenging times ahead. The disruption from discontinued research funding and clinical sources of revenue will put at risk new discoveries and clinical access for some of the most vulnerable populations. In addition, many investigators’ life’s work and decades of effort could be put at risk, further creating fear and uncertainty among faculty and staff.

As a result, leaders should approach faculty with diplomacy and tact. Leaders should pursue engagement and communication strategies to gain faculty support and alignment on the needed changes.

In tandem with these internal communications, academic health system leaders must also galvanize support locally, regionally, and nationally on the importance of their enterprises to the health and economic well-being of their communities. These institutions are among the largest employers in the region, supply the community with health professionals, provide critical health services not otherwise available in the community, and advance discovery that improves lives for generations to come. Leaders must consistently communicate these societal contributions to stakeholders in Washington, DC, and the broader community.
While health systems face considerable pressures ahead, healthcare leaders’ belief that advanced technology can enable better, more sustainable care delivery could pay off. But that will require organizations to ground this new stage of technical evolution in human-centric principles that prioritize trust, collaboration, and accountability. Only with this unique orientation can healthcare deliver the sustainable impact both healthcare consumers and organizations need.
Academic health enterprises must pursue revenue growth and cost-saving opportunities while also planning for some or all of the following five imperatives, in the event they become necessary:
1. Eliminate or reduce capacity in poorly performing programs, including potentially closing sites of care that are not sustainable. Programs with poor performance will often reflect a financially challenging payer mix, and their closure may disrupt services to the community. However, if the funds previously used to provide these services are no longer available, organizations may be forced to curtail these services.
2. Materially shrink the scale of the research enterprise to sustainable levels. Some academic health enterprises are now considering shrinking their research enterprise as the level of support required to sustain these activities is no longer affordable. Broad reductions in research funding may unfortunately require across-the-board reductions in the scale of the research enterprise.
3. Assess merger and partnership opportunities that increase scale to improve efficiency and market relevance. Cross-market merger and affiliation activity may become increasingly common, given that many markets are already highly concentrated. These mergers can be difficult to implement, especially in a highly challenging financial period, but they can provide additional opportunities for savings in both the clinical and academic cost structures.
  
  Furthermore, academic health systems may need to seek out partnerships with specialty providers that maintain the skills and capabilities to meet patient needs in a financially sustainable manner. Many academic health enterprises recognize the need to partner with providers who can bring expertise in areas such as behavioral health, post-acute care, and other related services.
4. Restructure relationships with university partners to better recognize the differences between operating a health system and a university. Many academic health enterprises continue to share infrastructure with their parent universities even though this approach can increase costs due to the differing business requirements of universities and academic health enterprises. Enterprises need mechanisms to recognize the differing requirements of these activities to improve efficiency, including the potential restructuring of relationships between the university and health system.
5. Share infrastructure across academic health enterprises and local competitors to improve efficiency. Leaders should look beyond their organizations for savings, including greater sharing of scientific resources across universities and medical schools. For example, communities with more than one medical school could achieve significant savings by sharing pre-clinical departments and faculty primarily focused on education.
  
  Opportunities also may exist to share high-cost infrastructure with other nearby health systems—even while remaining competitors. Digital technology may make it easier to consider development of regional lab, pathology, and imaging services that more efficiently support multiple health systems. Supply chain may be another area that can be managed across multiple health systems within current regulations.
Academic health enterprises must quickly determine which strategies will provide timely benefits so they can begin work on the most relevant ones.

Start technology-driven transformation with human-centered principles

While health systems face considerable pressures ahead, healthcare leaders’ belief that advanced technology can enable better, more sustainable care delivery could pay off. But that will require organizations to ground this new stage of technical evolution in human-centric principles that prioritize trust, collaboration, and accountability. Only with this unique orientation can healthcare deliver the sustainable impact both healthcare consumers and organizations need.

Sources:

¹ Emily Badger, et al, “How Trump’s Medical Research Cuts Would Hit Colleges and Hospitals in Every State,” The New York Times, February 13, 2025, https://www.nytimes.com/interactive/2025/02/13/upshot/nih-trump-funding-cuts.html.
² Moody’s Investor Service, Average 2023 Operating Margin for Health Systems with “Academic Medical System” as organization type.
³ Robert L. Phillips, Jr., et al, “The Balanced Budget Act of 1997 and the Financial Health of Teaching Hospitals,” Annals of Family Medicine, January 2024, https://pmc.ncbi.nlm.nih.gov/articles/PMC1466620/.