A Perspective from HTC’s Health Business Unit
US healthcare providers enter 2026 confronting one of the most turbulent financial environments in decades. Shifting federal policy, reimbursement constraints, workforce shortages, and persistent inflation have combined to squeeze operating margins across hospitals, academic medical centers, and integrated delivery networks.
Yet amid this instability, leading systems are finding relief and strategic advantage by partnering with IT service providers who can introduce AI-enabled automation, modernized infrastructure, and optimized operating models at scale. The latest insights from Everest Group, ISG, and KLAS reinforce a clear message: the most financially resilient organizations are those who lean into digital transformation with the right partners, not those who defer it.
Financial Reality: Margin Compression Is Accelerating
Recent policy shifts are reshaping reimbursement and coverage dynamics in ways that materially impact provider financials:
- Medicaid and ACA changes in the 2025 budget reconciliation law are projected to increase the uninsured population and reduce state payment flexibility, amplifying uncompensated care burdens, especially for rural and safety-net hospitals.
- Impending cuts to Disproportionate Share Hospital (DSH) payments, Medicare-dependent hospital adjustments, and ACA marketplace subsidies are poised to reduce critical revenue streams in the near term.
- Providers have already absorbed over $130B in Medicare and Medicaid underpayments, with Medicare reimbursing roughly $0.83 per dollar spent, a structural gap that has widened amid inflationary pressures.
- CMS payment updates for FY25 and CY26 offer incremental increases but remain below the economy-wide inflation rate, further tightening margins.
- States, too, are under strain, facing budget stress and managing large-scale Medicaid redeterminations that flow downstream to hospital balance sheets
These shifts reflect broader changes in healthcare regulation and regulatory mandates that are increasing compliance costs while constraining provider flexibility.
The result: more distressed M&A, more service line rationalization, more capital freezes, and a renewed urgency for strategic cost reduction.
For provider executives, the mandate is clear that cost structure transformation is no longer optional.
What Leading Analysts See: Technology & Services Partnerships as Catalysts for Sustainable Cost Reduction
Everest Group: Digital, Data, and AI Are Now Core Operational Enablers
Everest Group research shows that providers are accelerating investment in AI-driven workflow automation, data modernization, interoperability, and digital services to overcome legacy constraints and cost pressures. They highlight strong movement toward tech-enabled revenue cycle transformation, where AI (including generative and agentic AI) is materially improving throughput, accuracy, and financial yield.
Their healthcare IT and digital services research underscores how specialist partners help providers modernize infrastructure, embed intelligence into clinical/admin workflows, and ensure compliance while improving operational efficiency.
Analysts increasingly emphasize that sustainable cost transformation must span the broader healthcare ecosystem, including providers, technology partners, payers, and regulators.
ISG: AI-Centric Digital Transformation Is Now a Strategic Imperative
ISG’s upcoming Healthcare Digital Services reports emphasize AI, automation, telemedicine, and digital platforms as essential to improving efficiency and patient experience, especially as cybersecurity and data governance requirements evolve. Providers increasingly rely on IT partners to deliver agile frameworks, scalable architectures, and ready-to-innovate environments with measurable ROI.
Their 2025 research plan highlights the importance of agentic AI, sovereign cloud, enterprise service management, and outcome-driven digital transformation areas where service providers play a critical role in both design and execution.
KLAS: Cloud Modernization and ROI-Driven AI Are Top Provider Priorities
KLAS reports that while 80%+ of health systems use public cloud, most remain hybrid, highlighting the need for cost governance, predictable pricing, and skilled partners to avoid overspending. Providers plan to accelerate cloud migrations for EHR, analytics, and AI workloads, but many warn that hidden costs and governance gaps can derail expected savings.
KLAS-Bain research also shows a shift toward AI solutions with hard dollar returns, particularly in revenue cycle and clinical workflows, as health systems seek tools that rapidly pay for themselves.
The analyst consensus is unmistakable:
Providers who partner with capable IT services organizations are achieving structurally lower operating costs, improved productivity, and accelerated digital transformation compared to those pursuing internal-only approaches.
How IT Service Providers Drive Measurable Savings for Healthcare Organizations
Healthcare executives today need more than new technology; they need new operating models enabled by partners who bring scale, talent, proven methodologies, and risk-sharing options. The areas of greatest impact include:
1. Cloud & Infrastructure Cost Optimization
With rising data demands and hybrid-cloud realities, IT managed service providers help health systems:
- Reduce total cost of ownership (TCO) through workload rationalization, compute/storage rightsizing, and FinOps discipline, addressing the exact challenges KLAS identifies with cloud cost transparency.
- Improve resiliency, security, and the speed of innovation by standardizing landing zones and implementing AIOps to proactively prevent incidents.
- Navigate where private/sovereign cloud or selective repatriation may lower costs and enhance compliance, in line with Everest Group’s observed trends.
Impact for providers: More predictable operational costs, faster deployment cycles, stronger security posture, and measurable savings in infrastructure run-rate spending.
2. AI-Enabled Service Desk & End-User Experience Modernization
Clinician’s IT friction is both costly and a burnout driver. Service partners enable:
- AI-assisted, omnichannel service desks that deflect common L1 tickets and shorten time-to-resolution.
- Self-healing endpoints and automated remediation, reducing field dispatches and downtime.
- Experience-level improvements that translate into clinician productivity gains align with ISG’s insights into digital transformation priorities.
Impact: Reductions of 20–35% in service desk cost-to-serve and improved clinician satisfaction without expanding internal headcount.
3. AI-Augmented Business Process Outsourcing (BPO) for Administrative Scale
RCM, Patient Access, coding, scheduling, and other administrative areas are ripe for transformation.
- Everest Group reports widespread adoption of AI-driven denial prevention, claims analysis, and patient financial engagement, paired with strategic outsourcing to strengthen financial performance.
- Service providers supply trained, healthcare-native talent supported by automation, dramatically lowering cost-per-transaction while improving throughput.
- In the revenue cycle, partners can offer shared-risk commercial models tied to yield improvement, cost-to-collect, and days in A/R.
Impact: 15–40% administrative cost reductions, accelerated cash collections, fewer denials, and improved financial predictability.
4. Data, Analytics & AI Modernization for Strategic Decision Making
Providers consistently cite fragmented data as a barrier to performance improvement.
- Everest Group highlights the critical need for standardized, interoperable data infrastructure, advanced analytics, and AI integration for real-time decision support.
- Service providers help implement modern data platforms that accelerate insights for clinical, operational, and financial use cases.
Impact: Enhanced clinical productivity, reduced delays in decision-making, better forecasting, and AI readiness that avoids future technical debt.
The Strategic Takeaway for Provider Leaders
The macroeconomic and policy environment won’t ease soon. But evidence from the analyst community and real outcomes from providers show that strategic partnerships with IT service providers are among the most effective levers for cost transformation.
Executives who embrace this model are achieving:
- Lower structural operating costs
- Higher reliability and security
- Modern, scalable tech foundations
- AI-enabled productivity across clinical and administrative workflows
- Faster return on digital investments
- Greater financial resilience amid reimbursement uncertainty
Conversely, delaying modernization or relying solely on internal capabilities risk widening the cost gap and limiting strategic agility.
In this context, HTC helps healthcare providers translate cost transformation goals into execution through AI-enabled operations, cloud and data modernization, and healthcare-specific delivery models that improve efficiency without compromising care quality.
Some top areas where HTC can deliver the Fastest Savings for Healthcare providers.
- Cloud & Infrastructure: FinOps governance, workload optimization, hybrid operating models, and AIOps to reduce waste and improve resiliency
- Service Desk & End-User Support: Improved triage, automation with AI Integration, knowledge, and omnichannel support to reduce cost-to-serve and clinician friction
- EHR & Application Support: Operational stabilization, incident reduction, uptime improvements, and modernization readiness
- Administrative efficiency enablement: Automation and AI-led tech-enabled support models that reduce variability and manual effort
