A smarter path to healthcare sustainability

Key pressures shaping healthcare sustainability today

Hospitals are managing through a challenging mix of labor shortages, rising costs and growing service demand. These pressures aren’t temporary — they’re redefining how leaders plan, staff and run their organizations.

Workforce shortages and administrative overload continue to stretch teams thin. At the same time, many healthcare systems are rethinking where and how care is delivered, shifting away from a “keep every bed full” policy toward service-line and site-of-care strategies that balance mission with margin.

Recent performance data reinforces the urgency. Though Fitch Ratings’ 2025 medians show operating margins for not-for-profit hospitals rising to 1.1% in fiscal 2024 from 0.4% in fiscal 2023, these margins remain thin for organizations navigating inflation and wage pressures. In Fitch’s 2026 analysis of the Healthcare industry projects the top quartile healthcare performing operating in the 15% to 18% margin range while the bottom 40% of performers will likely have negative margins.  That spread tells a clear story: discipline, clarity and execution now matter more than ever.

The American Hospital Association’s 2025 Cost of Caring report describes this moment as a “perfect storm of financial pressures: persistent cost growth, inadequate reimbursement and shifting care patterns,” with systems struggling to maintain essential services amid workforce shortages, supply chain disruptions and policy decisions that don’t always align with operational realities.

Against this backdrop, leaders are being pressed to rethink work itself. “The systems built a decade ago can’t support the volume, speed or complexity of today’s environment,” said Deirdre Dillehunt, a Principal in Grant Thornton’s Healthcare practice.

And the leadership mindset is shifting. “We’re not trying to just survive the next four years,” said Jim Martin, Chief Accounting Officer at Providence Health. “We’re trying to figure out how to survive it and then thrive coming out the other side.”

Why workforce sustainability has become a strategic imperative

Clinician and staff wellbeing continues to shape organizational performance. Burnout, turnover and labor shortages now directly influence cost and quality of care. Our own research on healthcare workplaces shows the deep connection between chronic labor shortages and workplace stress (51% of healthcare workers saying it is the leading stressor), which in turn is a strong cause of workforce burnout, which averages 10 percentage points higher in healthcare than in other industries.

For many providers, the most draining pressures happen outside the exam room. The Commonwealth Fund notes that “workload, administrative burden and moral distress” are key contributors to clinician burnout. Nursing teams in particular continue to experience similar strain. The 2025 NSI National Health Care Retention & RN Staffing Report (PDF - 1.2 MB) shows hospital turnover at 18.3%, with RN turnover at 16.4%. These numbers represent thousands of experienced clinicians leaving roles each year.

Technology has a role to play. AI-enabled tools are increasingly being used to automate tasks that pull staff away from patients—such as data entry, scheduling and coding, giving clinicians more time to operate at the top of their license.

“The organizations making real progress treat technology as a way to protect their workforce,” said Scott McGurl, Grant Thornton’s Head of Healthcare. “It’s about giving people time, clarity and the ability to operate at the top of their license.” Providence’s experience reflects this shift: targeted automation and workflow redesign, Martin said, have reduced friction and improved consistency across clinical and administrative teams there.

How redesigned operating models strengthen healthcare performance

Amid economic and workforce challenges, incremental fixes aren’t enough. Leaders are stepping back to reassess their operating models: how decisions get made, how data is used and how work moves across the system.

A recent Becker’s Healthcare article shows a widening gap between high- and low-performing hospitals. Systems with clearer decision rights, stronger governance and standardized processes continue to outperform peers with similar patient volumes and payer mixes. Revenue cycle pressures add another layer. Rising denials, documentation requirements and administrative overhead continue to drain time and resources, reinforcing the need for integrated processes and consistent accountability.

“Real transformation comes from aligning decisions, data and accountability,” Dillehunt said. “Technology works best when the operating model is designed to scale good decisions, not just implement new tools.”

Martin agrees. “People make the right decisions when they’re provided with the right information,” he added.