As healthcare leaders nationwide grapple with rising uncompensated care and widening gaps in access, health systems are called to further invest in health equity. But that won’t be easy.
Uninsured rates have declined in recent years following the expansion of ACA subsidies. Still, coverage remains uneven across states, and pending federal policy changes to ACA subsidies could increase the number of uninsured and underinsured individuals next year. Hospitals are already reporting an uptick in bad debt and charity care, according to Kaufman Hall’s December 2025 “National Hospital Flash Report,” which shows a 10% increase over the last year and a 40% rise since 2022.
Despite these challenges, health systems remain committed to their roles in the community.
“Part of the core mission, vision, and values for Memorial Hermann is our commitment to our community,” said James McCarthy, executive vice president and chief physician executive of Houston-based Memorial Hermann, during an interview with the “Becker’s Healthcare Podcast.” “We are a nonprofit healthcare system in Southeast Texas. We are the largest nonprofit healthcare system in our region with a true lay board that has a volunteer board with a deep commitment to our community.”
That commitment is tested by the region’s payer mix and coverage challenges. Houston has one of the highest uninsured rates among large metropolitan areas in Texas, a dynamic that directly shapes Memorial Hermann’s strategy. For the next year, the health system is focused on improving access and keeping patients healthier to reduce avoidable utilization and long-term costs.
“Understanding how we pivot to meet those communities and try to keep them healthier to decrease their healthcare cost is a critical part of our strategy moving forward as well as reducing cost in all of healthcare,” Dr. McCarthy said.
Over the next five years, health system C-suites will need a new set of capabilities to successfully serve their communities.
“Achieving value, effective cost management, revenue enhancement and robust corporate governance will increasingly hinge on leaders who explicitly champion health equity as a critical economic priority, one that demonstrably improves outcomes and financial performance,” said Jahmal Miller, chief administrative officer of Dignity Health Mercy Medical Group, part of Chicago-based CommonSpirit Health. “This will necessitate elevating historically undervalued services such as community benefit, population health, community health, grantmaking, procurement and mission integration to core business and mission imperatives.”
Leaders with practical expertise and experience in population health and health equity will be in high demand. Nkem Chukwumerije, MD, president and executive medical director of The Southeast Permanente Medical Group in Oakland, Calif., sees executive teams becoming more outcomes-oriented and focused on health equity as they transform based on community needs.
“The primary focus will shift from fee-for-service care, which emphasizes the number of services provided, to value-based care and quantifiable health outcomes,” he said. “Success will be measured not just by financial performance but by the ability to improve the health of individuals as well as the entire population served, with an emphasis on attaining the highest level of health for all people.”
The push to address disparities is closely tied to broader concerns about healthcare affordability and sustainability. Dr. McCarthy said rising costs on everything from labor to pharmaceuticals are straining the system and making operational excellence and disease prevention increasingly important.
“A huge amount of our strategy moving forward for the next several years is going to be on increased efficiency and increased value proposition for our patients, for our employees, for the employers we work with so we can try to bend this cost curve and keep things from accelerating at the rate that they are,” he said.
Value-based care initiatives play a central role in that approach, particularly as the system looks to improve outcomes for underserved populations.
“We think that the value-based initiatives are going to be essential for us to be successful and to keep our communities healthy now and for generations to come,” Dr. McCarthy said.
Sharda Udassi, MD, associate chief quality officer of WVU Health System in Morgantown, W.Va., thinks the traditional operational leaders will give way to bolder, mission-driven system architects who are passionate about shaping care delivery and sustaining change based on cultural, economic and political shifts. She sees C-suites going beyond financial performance to become more stewards of quality, safety, equity and workforce well-being for long-term success.
“The healthcare systems leadership has been dragging their feet in these areas and now with more stringent implementation of value-based care across various states is going to assure engagement of C-suite leadership in healthcare quality, safety and experience improvement with a focus on improving outcomes that is long overdue,” said Dr. Udassi. “There are growing trends of clinicians going into leadership roles, making them more effective executives as more clinical-informed and also data-fluent leveraging digital transformation, AI and advanced analytics to move health systems from reactive care to proactive, population-centered models.”
The influx of data and AI-powered tools is making healthcare more transparent and facilitating systems thinking. Health systems will need to identify ways they can serve all populations and coordinate complex healthcare conditions in the future.
“We will need to build resilient learning organizations that align strategy with purpose and deliver measurable, lasting improvements for patients, communities and the healthcare workforce,” said Dr. Udassi. “We owe this to the communities that we serve.”
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