Trends in Healthcare & Governance

In an uncertain and constantly changing healthcare environment, board members and leaders must maintain a focus on their organization’s mission. As you navigate a path forward, we encourage you to consider the following 10 healthcare trends and recommendations from The Governance Institute’s recent article:

1. Intensifying financial pressures. Boards should:

• Sharpen financial literacy, request transparent financial data and reporting from management and set clear expectations for disciplined cost management, workplace safety, workforce planning and new revenue strategies.
• Review operating and capital budgets, financial plans and the organization’s debt capacity, and update as circumstances change to ensure alignment with organizational needs.

2. Workforce redesign and physician burnout. Boards should:

• Ask management to analyze workforce age to anticipate retirements, skills inventory, volume seasonality (and the impact on workforce needs), and volume trends and site of care delivery (e.g., outpatient, inpatient and emergency room).
• Ensure leadership prioritizes workforce well-being, flexible staffing models, physician alignment strategies and investments in culture to sustain clinical capacity. Monitor evolving robotic technologies that may help offset labor costs.

3. Capital constraints and infrastructure needs. Boards should:

• Align capital allocation with strategic priorities, balance debt capacity and explore creative financing or partnerships. Develop a robust strategic plan to guide investment decisions and set priorities for capital allocation.

4. Digital transformation and AI integration. Boards should:

• Oversee digital strategy and cost/funding, ensure ethical and safe AI use, invest in cybersecurity, and assess the return on investment for digital health tools. Ask critical questions, such as: Are the AI algorithms working as expected? Do our doctors and nurses trust and use them?

5. Consolidation and partnerships. Boards should:

• Actively evaluate partnership opportunities, merger and acquisition rewards and risks, and alignment with mission, while ensuring due diligence and post-merger integration oversight. If you are considering a merger/partnership, ask a key strategic question: Is your organization positioned to be an integrator (acquirer) or an integratee (acquired)?

6. Mental and behavioral health. Boards should:

• Stay engaged with management regarding integration of mental and behavioral health services into community resources and new care models.
• Ensure the board is educated on the specific needs of different patient groups — youth, adolescent, adult and senior — and implications for outpatient, inpatient and long-term capacity and access.
• Consider contracting/partnering with specialized behavioral health providers and ensure the organization pursues governmental funding that supports these services.

7. Continued rise of value-based and risk-bearing care/payment models. Boards should:

• Monitor risk exposure, build expertise in population health and risk-based care management, and support infrastructure for data analytics and care coordination.
• Work with your medical staff to ensure model buy-in, clearly align economic incentives and monitor adoption of care management tools.

8. Technology-enabled care beyond the hospital. Boards should:

• Oversee investment in care-at-home models, partnerships with vendors and new risk/reimbursement models supporting virtual and distributed care. Explore partnerships as a way to access capital, knowledge and patient care models. Stay current on management’s efforts to keep their IT investments up to speed with access, communication and care model use requirements.

9. Consumerism and patient expectations. Boards should:

• Hold management accountable for patient experience and quality metrics, consumer-focused innovation and competitive positioning against disruptors. Ensure the organization is truly user-friendly and has a robust digital access platform.
• Ensure leadership has strategies in place to proactively address health misinformation, including clear patient communication, trusted clinical voices and digital education that reinforces evidence-based care.

10. Health disparities and community responsibility. Boards should:

• Work with management to set measurable goals, partner with community resources, link progress to executive performance, and monitor community-impact reporting and documentation of tax-exempt justification. If your organization has risk-based contracts, tie these into community social determinants of health resources.

To read about these trends in more detail, refer to The Governance Institute’s article.

Note: Trends is available as a PDF for convenient sharing with your board colleagues.

Information for this article was obtained from Healthcare Forecast 2026: 10 Trends for Board Members, Senior Leadership, and Physician Leaders, By Steven T. Valentine, president, Valentine Health Advisers, and Guy M. Masters, president, Masters Healthcare Consulting, The Governance Institute, January 2026

Rising healthcare costs, demographic shifts and rapid innovation are reshaping how hospitals and health systems operate. On the positive side, financial performance has mostly stabilized since 2023, quality outcomes continue to improve and organizations have expanded how they support clinicians, improve access and drive productivity.

Yet, significant challenges remain, with structural pressures intensifying. Affordability, workforce shortages, capacity constraints and shifting payer dynamics are creating uncertainty. Long-term demographic trends will further affect demand and utilization, so leaders need to balance near-term financial stability with sustained investment in innovation and growth. 

New Vizient report examines the market forces redefining the healthcare industry in 2026

The report identifies five key findings:

1. The U.S. healthcare system is under structural pressure with higher costs, rising complexity and persistent quality challenges. The system is taking on more, delivering marginally more and paying far more.
   • Multiple forces are reshaping the landscape, pointing to the need for scalable, resilient and consumer-centered healthcare operating models.
2. Financial sustainability is likely to be challenged as demographic, policy and innovation headwinds accelerate. Across the board, this means more volume, less favorable reimbursement and higher risk.
   • These headwinds allude to a more volatile financial environment requiring diversified revenue strategies and cross-ecosystem partnerships.
3. Cost pressures are evolving, not easing. Workforce shortages persist as drug, device and supply costs surge. A higher labor cost floor, accelerating workforce shortages and rising expenses are redefining margin resilience.
   • To protect margins and sustain performance, health systems will need advanced analytics, scale-enabled efficiencies and disciplined, systemwide spend management to manage persistent cost growth and build more resilient operating models.
4. Market behavior is evolving from large-scale mergers and acquisitions to include strategic, vertical and ecosystem partnerships. The new market advantage is ecosystem orchestration built around owned assets.
   • With some disruptors cutting back and platforms scaling value-based models, growth is increasingly driven by agile, capability-focused partnerships rather than consolidation alone.
5. Artificial intelligence offers real potential to reduce waste and transform operations. Turning AI’s promise into performance depends on redesigning workflows, not just deploying tools.
   • AI’s impact depends on disciplined integration, governance and workflow redesign. A divide is emerging between organizations building system-level AI capabilities and those relying on isolated pilots. The report suggests that health systems that embed AI as a foundational operating capability will be more successful.

All these trends should challenge the way leaders think about revenue, growth and efficiency while sharpening the strategic agenda. Organizations that address internal cost structure, redesign workforce models, embed technology and align service mix with population needs will be better positioned to sustain performance. The next era of healthcare will favor integrated, data-enabled and collaborative operating models that turn pressure into progress.

For more details on these insights to help you navigate the year ahead, read Vizient’s Trends report.

Note: Trends is now available as a PDF for convenient sharing with your board colleagues.

Information for this article was obtained from Vizient’s Jan. 22 report, New margin math: The trends resetting healthcare’s financial foundation, Vizient, Jan. 22, 2026.

Thoughtful processes to onboard new trustees and ensure ongoing education are imperative to optimize board engagement and performance. The American Hospital Association released the third and final chapter of its triannual National Governance Report (available to AHA members) that focuses on board position descriptions, orientation and education practices. It is based on data collected from hospitals and health systems across the country between August and December 2024.

How do your board practices compare to the following trends?

Board position descriptions

• Thirty-one percent of all respondents reported that they did not have job descriptions for their board members, board chair or committee chairs, consistent with the 2018 survey.
• Trends regarding use of job descriptions were similar among all board types (system, subsidiary and freestanding), with descriptions for board members and board chairs being used most.

Board orientation

• Eighty-one percent reported having a formal new board member orientation, similar to 2018.
• The following activities were most often reported as included in orientation for new board members:
  • meeting with the CEO and/or senior leadership team (93%);
  • having a healthcare governance orientation (84%); and     
  • taking a facility tour (75%).
• Orientation on healthcare was conducted among 69% of respondents.
• Formal mentoring with a senior board member was reported by 42% of system boards, 22% of subsidiary boards and 23% of freestanding boards.
• Only 24% of respondents conduct a formal orientation for new board chairs.

Board education

• Only 32% of all board types reported that continuing education was a requirement for board member service, an increase from 29% in 2018.
• The percentage of health systems requiring continuing education of their board members decreased from 43% in 2018 to 36% in 2024.
• Most systems (53%) and subsidiary hospitals (43%) said they were providing formal board education quarterly to their members, while freestanding hospitals (41%) were more likely to do so annually.
• Board continuing education was reported to be most frequently delivered at board/committee meetings by 73% across all board types. Self-directed (articles, online resources, etc.) was the second most common method of delivery.
• Eighty-one percent of all board types periodically conduct an educational briefing from legal counsel or others on compliance issues, with conflicts of interest being the second most covered topic.

Refer to Chapter 3 of AHA’s report for more details and tips on these practices from a governance expert.

Note: Trends is now available as a PDF for convenient sharing with your board colleagues.

Information for this article was obtained from: 2025 National Governance Report: Chapter 3, American Hospital Association (available to AHA members).