Hospitals and health systems must strategically manage rising GLP-1 costs while balancing workforce health and long-term financial sustainability.
GLP-1 therapies such as Ozempic, Wegovy, and Mounjaro are rapidly changing the conversation around obesity, diabetes, and population health. But for hospital and health system executives, the rise in utilization of these medications presents a dual-edged sword: on one hand, the potential for transformational clinical outcomes; on the other, a surge in employer healthcare spending and formulary disruption.
In the latest HealthLeaders Winning Edge webinar, titled “The Winning Edge for Employer GLP-1 Cost Containment,” a panel of healthcare experts examined how health systems and self-insured employers can create responsible, outcomes-oriented benefit strategies that promote access without financial overexposure.
Panelists included Dr. Sandy Baldwin, Chief Medical Officer for Northwell Direct, Bill Lacy, President and CEO of the Association for Corporate Health Risk Management (ACHRM), and Dr. Jeff Post, Chief Clinical Officer at RX Connection.
Together, they offered a compelling roadmap for health systems balancing cost containment, workforce wellness, and innovation. Watch the entire video below.
The rent-vs.-buy decision is no longer a back-office issue. It’s a strategic lever—one that can improve liquidity, agility, and patient care.
As hospital margins tighten and technology evolves, the decision to rent or buy medical equipment is critical.
According to a Precedence Research survey, some 46% of U.S. hospitals used equipment rental in 2024, indicating a growing trend of hospitals turning to rental to manage budgets. For CFOs, understanding the strategic implications of equipment acquisition is paramount.
With inflation, shifting interest rates, and federal reimbursement challenges, the traditional capital purchase model is being challenged by flexibility, speed, and lifecycle management concerns, according to Bettyann Bird, chief strategy officer at medical equipment company Agiliti.
“It's almost reorienting historically how we've gone about thinking about rental vs. capital,” she says. Bird spent her early years in health care as a trauma and intensive care nurse, gaining first hand experience in using medical equipment.
The Upside of Renting
One of the strongest arguments in favor of renting is financial flexibility. Equipment rental typically requires lower upfront costs, which preserves capital for higher-yield investments or urgent expenditures.
“You can avoid tying up millions [of dollars] in depreciating assets,” Bird notes.
This is particularly valuable for startups, outpatient facilities, and hospitals navigating uncertain volumes. CFOs must think critically about how much their system actually uses its equipment. They must also understand all of the additional costs that come with purchasing equipment.
“The total cost of ownership is so much more than just the device itself,” Bird says. “It's the training. It's the parts. It's the time. It's a whole lot more, and oftentimes that's not taken into consideration. That is something that CFOs and supply chains should certainly be aware of, but I don't know that that's still registering as much right now.”
“Specifically,” Bird says, “we find that hospitals need to incorporate probably an additional 10% of whatever the price of that device to accommodate for that additional cost.”
Another often-overlooked benefit to renting is maintenance and service bundling. Most rental agreements include full service and maintenance, eliminating unexpected repair costs and reducing the need for some in-house staff; this can streamline operations and lower total cost of ownership.
Renting also allows organizations to stay current with technology. With equipment life cycles getting shorter—especially for diagnostic imaging and some surgical robotics—rentals enable easy upgrades without being stuck with outdated machines. Bird says renting can ultimately give CFOs a hedge against obsolescence.
Tariffs have also impacted this space, according to Bird.
“I would say that probably there's been a decrease in capital purchasing because of tariffs and so we're actually seeing rentals go up right now as hospitals try to get their head around it,” Bird says.
Weighing the Factors
Jonathan Ma, CFO of Sutter Health, says he is open about the many considerations that go into the decision of purchasing vs renting.
“It depends on a lot of different factors,” he says. “We're trying to balance obviously the financial considerations of it all, but also the scale of the rapidity with technology changes and making sure we have our physician inputs as well.”
“I think there are different perspectives out there, and for our system we have a mix of both approaches. It's actually a trade-off that we look at frequently,” Ma says.
Ma acknowledges that there is not a universal answer when deciding to buy or rent. Since the factors vary for every system, CFOs must scrutinize and understand the needs of their system through their data and clinical teams.
Another factor hospitals are considering, Bird says, is purchasing revenue-generating equipment, such as ultrasounds, diagnostic imaging or even beds. For a piece of equipment to be revenue generating, it must be a durable device that enables the hospital to provide services and procedures, ultimately contributing to income. Beds, for example, are needed because if there isn’t a bed, there can’t be a patient. Equipment like disposal medical supplies, or training equipment, would be non-revenue-generating. CFOs should be looking at their patient population to uncover what specific equipment brings in more revenue and can be multipurposed not only for inpatient services, but outpatient too.
The Drawbacks and Hidden Costs
Despite these advantages, renting comes with potential downsides. Over time, long-term rental costs can exceed purchase costs, particularly for high-utilization equipment like infusion pumps or patient monitors.
“You’re paying for convenience and risk mitigation,” Bird warns, “but over a five-year span, you may pay twice the asset’s value.”
Another issue is availability and consistency. In peak demand periods such as flu season or during public health emergencies, rental inventory may be scarce. Additionally, rented equipment may vary in quality by brand or model, potentially complicating staff training and clinical protocols.
CFOs must also pay close attention to contract terms; hidden fees for late returns, equipment damage, or extended usage can significantly bloat costs and ultimately hurt the bottom line. Establishing clear payment timelines or setting up an automated payment process can help mitigate this potential pitfall.
A Balanced CFO Approach
CFOs can develop a hybrid acquisition strategy that blends both rental and purchase models, depending on utilization rates, clinical needs, and asset value. Many health systems already do this. High-usage, mission-critical equipment is usually better when bought, while rarely used or rapidly evolving technology can be rented.
To assess the best option, finance leaders should partner with clinical and supply chain teams to analyze usage patterns and projected demand. Bird advises CFOs to look at asset turnover ratios, maintenance logs, and capital budget forecasts side by side, then layer in a total cost of ownership analysis that includes depreciation, tax benefits, and potential resale value.
Furthermore, contract negotiations should be rigorous. CFOs should scrutinize service-level agreements, exit clauses, and escalation terms. Also, they can negotiate a better price point if they’re contracting for a long-term rental.
Bird advises CFOs to not treat rental as an operational expense to approve blindly, emphasizing that it needs the same scrutiny as a capital investment.
Contract labor still strains margins for many health systems.
In a healthcare landscape as turbulent as today’s, finance leaders are forced to scrutinize every detail of their operations. With labor costs skyrocketing since the pandemic, reducing reliance on contract labor has been a large pain point for finance executives.
While contract labor helped UW Health remain operational during staffing crises, the extended use of high-premium positions has strained financials and tested long-term viability. In this episode of HL shorts, UWHealth’s vice president of finance Jodilynn Vitello discusses the impacts of heightened contract labor on finance and beyond.
For a deep dive into UW Health’s labor strategy checkout the accompanying article with Vitello full interview.
Could health systems ditch traditional high-deductible health plans for direct primary care models?
Direct Primary Care (DPC) models can stabilize income and reduce administrative overhead, but success hinges on clear patient education, defined service scopes, and compliance with evolving state regulations. With a payment model where patients pay a recurring flat fee directly to providers for defined primary care services, bypassing insurers and the complexity of claims-based billing becomes accessible.
While DPC appeals to patients facing Medicaid cuts or high-deductible plans, up-front costs may still deter low-income individuals. CFOs must note that even financially sound strategies can erode public trust if not paired with compassion, advocacy, and equitable access safeguards.
Check out this infographic for what CFOs should consider before implementing a model like DPC.
Also check out the accomapniynig articles, part one and part two.
As financial pressures grow, CFOs are eyeing Direct Primary Care as a more stable, patient-focused alternative—though not without risks and regulatory challenges.
For a CFO, uncompensated care is an acute sore spot. High-deductible health plans (HDHPs) are on the rise as payers and employers attempt to control costs, leaving more patients unable to afford care.
In part one of this two-part story, we examined how looming Medicaid cuts are pressuring CFOs even more to find stable financial footing, and how direct primary care models could offer a viable solution for some markets.
Direct primary care models (DPC) allow patients to pay a recurring flat fee directly to providers for defined primary care services, bypassing insurers and the complexity of claims-based billing. Direct primary care models could offer CFOs a clearer, more predictable revenue path, but they also come with certain risks and patient expectations.
Risks, Regulations, and Patient Expectations
Despite its benefits, DPC requires careful implementation. Patients may misunderstand what is (and isn’t) covered.
"Clear contracts and a detailed fee schedule of services included are essential to set expectations," said Hari Prasad, CEO of Yosi Health, a New York City-based concierge medicine provider. Furthermore, some states have regulatory ambiguity around direct patient-provider contracts.
Affordability is another concern, particularly for lower-income patients. Still, for many, especially those navigating Medicaid instability or HDHPs, DPC offers value. "Patients appreciate knowing they will not face surprise bills for covered primary care," Prasad said.
To prepare for these risks around regulations and patient expectations, CFOs should engage compliance teams early to navigate state-specific DPC regulations, develop patient education materials to clarify the scope of services, and potentially offer sliding scale or hybrid models to expand access while preserving financial sustainability. There is room for flexibility within the DPC model if providers can develop a clear, comprehensive strategy around implementation.
Balancing Innovation with Ethics and Trust
The pay-first aspect of DPC echoes broader conversations in the industry around pre-payment. Just a few months ago, the industry witnessed the backlash aimed at Cleveland Clinic for implementing its pay-now policy, enough that it was reversed shortly after. While Cleveland Clinic’s model was inherently different from a DPC model, the incident still highlights the ethical factors in implementing a new payment model and how it affects healthcare access to lower income patients.
Rick Gundling, senior vice president at HFMA, points out that, "As out-of-pocket costs for consumers have grown… providers are much more at risk for nonpayment." However, Gundling also emphasizes the need for trust: "Compassion, patient advocacy, and education should be part of all patient discussions."
At the recent annual HFMA conference, Gundling presented a five- step framework for CFOs to make ethically-sound financial decisions.
"Ensuring a good financial experience for patients is important for many reasons—it reduces administrative costs and improves financial results for healthcare organizations, it enhances patient satisfaction and loyalty, and—perhaps most importantly—it helps patients make better decisions about their healthcare," said Gundling.
For DPC to succeed, health systems must tread carefully, and, like every innovation in healthcare, must combine financial innovation with a commitment to transparency and equity.
As financial tension grows to new heights, the industry demands a plan to reshape outdated processes. For finance leaders, the time is right to explore how.
Could health systems ditch traditional high-deductible health plans for direct primary care models?
As healthcare CFOs contend with growing financial pressures—from high-deductible health plans (HDHPs) to rising uncompensated care—many are exploring alternatives to the traditional fee-for-service (FFS) model. One such model gaining traction is Direct Primary Care (DPC), where patients pay a recurring flat fee directly to providers for defined primary care services, bypassing insurers and the complexity of claims-based billing.
A DPC model can fundamentally change a health system’s revenue for the better, according to Hari Prasad, CEO of Yosi Health, a software platform focused on creating an easier way for patient intake. For CFOs, this represents a seismic shift in financial predictability and operational efficiency.
RCM Stabilization & Simplification
With a DPC model, health systems receive consistent monthly or annual payments directly from patients, which can improve cash-flow forecasting.
"Instead of waiting for insurance adjudication and reimbursements, practices receive consistent monthly or annual payments... [DPC is] making cash‐flow forecasting far more reliable," Prasad said.
Additionally, DPC significantly reduces the administrative burden of revenue cycle management, particularly in claims submission, follow-ups, and denials. This can allow finance teams to reallocate resources toward high-acuity billing or other strategic projects.
To make this model actionable, CFOs can consider strategic partnerships with DPC-affiliated primary care groups to stabilize outpatient revenue. Making effective technology investments that support subscription-based billing and patient engagement, and realigning RCM staff toward complex service lines like inpatient and specialty care are also necessary.
Alleviating Uncompensated Care
"As out-of-pocket costs for consumers have grown, given the growth of HDHPs, providers are much more at risk for nonpayment," said Rick Gundling, Senior Vice President at the Healthcare Financial Management Association (HFMA) and a former CFO.
With incoming Medicaid cuts, every CFO is stressed about uncompensated care, especially those at smaller and rural systems. In rural and safety-net hospitals, where bad debt from delayed or deferred care runs high, DPC could offer a proactive solution.
"By offering affordable, transparent flat fees—often well below high insurance-plan deductibles—DPC can encourage timely primary care," says Prasad. This shift could even prevent downstream ER overutilization and reduce costly acute episodes.
For hospitals, this creates an opportunity to reshape service distribution, as many routine visits become ‘in‐house’ subscription services, therefore easing uncompensated care burdens, according to Prasad.
To zoom in on this connection to community ER utilization, CFOs can work with their teams to analyze ER utilization data to identify patients who could be better served through a DPC option. If the model seems viable for their health system, CFOs can then pilot hybrid DPC programs alongside existing coverage models in high-need communities. Lastly, to determine the ROI of these programs, CFOs can quantify savings from reduced ER volume and reallocate resources to population health programs.
DPC may not replace traditional billing models systemwide, but for CFOs seeking financial predictability, to lower bad debt, and create leaner RCM operations, it presents a compelling strategy.
Check back on Monday for Part 2 where we’ll dive into the risks, regulations and patient expectations around direct primary care models, as well as the imperatives of ethics and trust in implementation.
With denials on the rise, more health systems are turning to AI in the revenue cycle.
Payer denial prevention emerged as a significant theme throughout almost every session at HFMA 2025.
At a time when payer denials are spiking in both volume and complexity, revenue cycle leaders from Banner Health, Houston Methodist, and Legacy Health came together to share results from pioneering AI-driven denial management programs. Their message was clear: AI isn’t just a buzzword, but rather, a critical tool in the battle for financial sustainability and operational resilience.
The Denials Dilemma: Complexity and Volume on the Rise
Lisa Schillaci, VP of Revenue Cycle Operations at Houston Methodist, noted that payers are increasingly requesting medical records without discretion, overloading revenue cycle teams and dragging out reimbursement timelines. Terrie Handy of Legacy Health pointed out a sharp rise in DRG downgrades and a lack of transparency, while Katie LeBlanc of Banner Health emphasized that traditional workflows are ill-equipped to manage the new denial landscape—one that payers are reshaping with sophisticated AI under the guise of “payment integrity.”
The CFO To Do List
Prioritize Denial Prevention
Prevention, not just recovery, must be the focal point, according to these leaders. Carefully worded managed care agreements and pre-authorization centralization are leading to tangible results for health systems. CFOs should ensure their contracting teams are armed with detailed historical denial data to negotiate more protective terms in their next payer meeting.
Choose the Right AI Deployment Strategy
One recurring theme during this session was the tense decision of either building internal capabilities or partnering with external vendors. Banner Health, for example, created “BannerWise,” an in-house AI system. However, LeBlanc cautioned that internal development can divert valuable operational resources and even delay implementation. Moving teams around is a tall order, she shared. Legacy Health and Houston Methodist leaned more on trusted vendor partnerships, especially for AI-generated appeal letters and DRG downgrade responses.
For CFOs, be sure to balance investment between internal innovation and trusted vendor solutions to accelerate time and value without overstretching internal teams.
Centralize and Simplify Data
Schillaci underscored the difficulty of finding actionable insights from the EHR. “What’s disguised in all of the data is what’s actionable,” she said.
Her team has focused on consolidating payer authorizations and denial workflows to better identify trends and accelerate appeal timelines. Using AI to triage and prioritize appeals, especially appeals with high overturn potential, has already produced noticeable decreases in denial volumes.
For CFOs, be sure to invest in analytics platforms that unify clinical and financial data to drive real-time, actionable decision-making.
Develop a Clear AI Strategy—Not a Shiny Object Wishlist
As AI enthusiasm grows, Handy warned leaders not to get distracted. She expressed that without a clear strategy, teams will go to trade shows and get excited about the wrong things. The session emphasized the need for governance. Legacy Health recently formed an AI oversight committee, while all three organizations emphasized cross-functional collaboration across clinical, IT, and revenue cycle teams.
For CFOs, be sure to establish an AI governance committee that includes finance, clinical, and IT leaders to align investments with measurable outcomes.
Looking Ahead: A Learning Curve, Not a Magic Wand
While Schillaci admitted her team was skeptical at first, they were also excited. Each panelist agreed that AI is not a silver bullet, but a strategic lever—especially when paired with strong operational foundations and a prevention-first type of mindset.
In today’s healthcare climate, leading with integrity isn’t optional. It’s the expectation. For CFOs at HFMA this year, the message in one session was clear: financial decisions aren’t just strategic—they’re ethical.
As the healthcare landscape becomes more entangled with regulatory burdens and advanced technologies, the ethical dimension of financial decision-making only grows more important.
At the HFMA conference Senior Vice President and former CFO Rick Gundling gave members a five step framework for ethical decision-making, a simple checklist to ensure leaders are looking at their decisions with a critical eye and questions they can ask themselves at each step.
Want more details? Check out the accompanying article here.
UVA Health's new CFO shares her advice for other CFOs.
In this episode of HL Shorts UVA Health's CFO Stephanie Schnittger shares advice for other fellow CFOs on how to navigate the fast-paced challenges that are prevalent in healthcare today, including margin pressures, labor shortages, and financial uncertainty in 2025 and beyond.
See what Schnittger, a long-time finance executive who has worked at various organizations, has to share.
As public trust declines and technology transforms decision-making, CFOs must lead with ethics, not just compliance.
Plato once said, "Good people do not need laws to tell them to act responsibly." In healthcare finance today, acting responsibly requires more than laws: it demands unwavering ethical leadership.
As trust in healthcare institutions continues to erode, finance executives are navigating murkier waters. Surveys show trust in government health agencies fell to 61% as of January 2025, while confidence in physicians and healthcare leaders declined 12% since 2023. Layer in the surge of misinformation and growing distrust in media, and the job of stewarding financial decisions that impact patient care becomes entrenched with ethical complexity.
A session at the recent HFMA Annual Conference tackled this challenge head-on, making the case that finance leaders must proactively engage with ethics and not shy away from it.
The Basics Still Matter
Led by former CFO and HFMA senior vice president Rick Gundling, the session opened by grounding attendees in ten core ethical principles that serve as practical reminders amid healthcare's growing complexity. These include:
Screen and stabilize all patients who seek emergency treatment regardless of their ability to pay.
Provide high-quality patient care without asking for or taking anything of value for referrals.
Bill only for medically necessary services provided.
While some of these may seem obvious and foundational, Gundling emphasized how easy it can be for leaders to lose sight of these basics. Revisiting these principles is critical as finance teams weigh both routine decisions and high-stakes strategic pivots.
It's imperative to maintain an ethical tone at the top, in the C-suite, Gundling advised. Leaders at this level decide whether ethics count and must model not by what they say, but by what they do.
To help leaders systematize their approach, Gundling introduced a five-step framework to navigate ethical decisions with rigor and consistency:
Identify the ethical issues.
Get the facts.
Evaluate alternative actions through different lenses.
Choose an option for action and test it.
Implement your decision and reflect on the outcome.
AI and the Ethics of Innovation
As artificial intelligence becomes more integrated into clinical, administrative, and financial operations, CFOs will be called on to address new ethical frontiers, according to Gundling. There are both legal and ethical considerations that leaders must grapple with as AI grows across health systems.
Under the ethical umbrella, leaders will need to consider regulation, privacy, mitigation of bias, transparency and relevance. Meanwhile, under the legal umbrella, leaders will need to think about governance, confidentiality, liability, accuracy and decision making.
Emerging topics like robot rights, algorithmic inclusion, and machine-led cognitive services may seem distant, but Gundling stressed that forward-thinking CFOs should engage with these now rather than reacting later. Moreover, he posed a critical question: when does existing policy need to evolve to meet new ethical challenges?
The Ethical Bottom Line
Gundling left attendees with a powerful reminder: being ethical is about more than checking a compliance box. It's about judgment, intent, and clarity of values, especially with external pressures like Medicaid funding cuts and intense public scrutiny.
Gundling closed the session with three essential truths for finance leaders:
Morals are principles; ethics are the behaviors that reflect them.
No matter how robust the policy, ethical judgment is often a solo act.
Technology is reshaping what ethical decision-making looks like, so stay ready.
