Each year, L.E.K. Consulting surveys hundreds of hospital and health system executives to understand their outlook for the year ahead, their strategic priorities and the specific actions their systems plan to take over the coming (approximately) three years. This year, L.E.K. fielded this annual survey in late July and early August 2025, just weeks after the passage of the One Big Beautiful Bill Act (OBBBA), providing a unique view into the policy changes executives are most concerned about — and how hospitals are responding to these and other potential regulatory changes (see Figure 1).
Top concerns for health system executives
Executives are most concerned about Medicaid and Affordable Care Act (ACA) changes passed in the OBBBA, 340B reform, and tariffs. The results are clear: More than half of the respondents believe that the impact of each of these policy changes on their organizations will be significant (see Figure 2).
Medicaid and ACA enrollment losses
One key area of concern for respondents is the expected decline in Medicaid and ACA marketplace enrollment. The resulting increase in uninsured patients could drive higher levels of uncompensated care and decreased patient volumes for elective services. Decreased Medicaid volume also poses a direct threat to 340B eligibility.
Survey respondents are already taking steps to respond. Executives highlighted three areas of focus (see Figure 3):
- Reprioritizing service line investments toward areas with better margins
- Exploring strategic partnerships with payers, physician groups and community organizations that can help them maintain financial health
- Advocating for state-specific policy relief, such as urging governors and Medicaid agencies to seek flexibility in 1115 waiver design (e.g., broader exemptions, simplified reporting or phased timelines) to soften the impact of new eligibility requirements
340B program reform
The 340B program is a critical source of support for a majority of U.S. health systems, contributing to the ability of providers to sustain access and invest in care across rural, community and urban settings. The Trump administration is already piloting a rebate program (as opposed to the up-front discounts that are the normal 340B mechanism) and has begun initial steps toward reducing reimbursement for 340B-purchased drugs. Additionally, legislative proposals under discussion would further tighten eligibility, limit contract pharmacy use and reduce the scope of covered outpatient drugs.
In response, hospitals are already acting (see Figure 4):
- Modeling financial scenarios to understand how different reform pathways would affect margins and identifying offsetting levers
- Reevaluating contract pharmacy arrangements, prioritizing those serving high Medicaid and underserved populations, to strengthen compliance positioning and demonstrate alignment with 340B’s intent
- Engaging legal and policy advocacy resources to track regulatory developments, prepare for audits and influence the direction of potential 340B reforms
Tariffs
Another pressing issue for hospitals is the impact of tariffs. While tariffs are not targeted at medical products specifically, many critical supplies and pieces of equipment are sourced from countries subject to these trade measures — leaving hospitals exposed to rising costs and ongoing uncertainty about future duties.
Hospitals are adjusting their supply chain strategies to mitigate tariff impacts (see Figure 5):
- Renegotiating contracts and consolidating purchasing to offset higher costs and capture scale discounts
- Shifting suppliers toward both domestic sources and less-tariffed countries in order to reduce exposure to trade policies
- Managing inventory and contract terms by increasing stock of high-risk items and using long-term agreements to hedge against future price spikes
Planning for what’s next
It is clear that hospitals are not waiting on the sidelines. Leaders are actively scenario-planning, restructuring supply chains, tightening compliance and seeking partnerships to protect margins and sustain care delivery.
We work with provider organizations to respond to these pressures with structured strategies. Our teams help executives assess regulatory risks and their financial implications, drive cost improvements, transform operational performance and make disciplined decisions on capital deployment and partnership strategies to support both near-term stability and long-term sustainability.
If you are interested in discussing how L.E.K. can support your organization in navigating these challenges, please reach out to us.
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