As labor shortages intensify, Unity Medical Center's CEO is leaning on early pipelines, staff flexibility, and lived experience to enhance recruitment and retention.

Rural hospitals are struggling to stay staffed, making it harder to stay open.

With financial constraints and labor shortages squeezing providers, small facilities often lack the resources or scale to compete for top talent. At Manchester, Tennessee-based Unity Medical Center, however, CEO Martha Henley is proving that a local, personalized approach can help level the playing field.

“We have been very blessed to have a great partnership with our high schools and our secondary schools,” Henley told HealthLeaders. “We have nurses or potential nurses coming in and rotating through. We've allowed some of our staff to go and help teach some of those courses. So that collaborative effort is grooming those people to know that they want to work for us.”

It’s a workforce pipeline rooted in proximity and familiarity, and it’s helping the hospital remain independent and weather a storm that’s closing rural facilities across the country. According to The Chartis Center for Rural Health, 182 rural hospitals have closed or converted to an operating model that excludes inpatient care since 2010, with staffing cited as one of the leading factors.

Henley’s approach of engaging students early, mentoring them through clinical exposure, and giving them space to grow, has since expanded to the other hospitals under her oversight through Java Medical Group, which she also serves as COO.

“If they don't come to work for us, they come to work for someone that is also helping us,” she said, highlighting that cultivating healthcare workers locally strengthens the broader rural health ecosystem.

Re-recruiting from within

The same philosophy carries over once someone joins the team. Rather than locking employees into a single role, Henley encourages cross-training and internal exploration to find the right fit.

“We may hire someone to be a Med Surg nurse and they could be a great nurse, but they just don't love it,” she said. “So if they have the flexibility to cross-train into a surgical department or another area, we can find what they love and they're going to stay.”

Henley says this approach directly combats burnout, which remains a significant post-pandemic threat, especially in smaller facilities that can’t offer scale-based relief. “If their quality of life at home is great, it's going to be reflected in the work as well—and vice versa,” she said.

That strategy also gives Unity a differentiator in a tight labor market, where rural providers often struggle to compete with urban systems offering higher wages and signing bonuses.

“The nursing shortage is real,” Henley said. “We're in competition with some people that have a lot bigger pockets than we do. So one of the things that we focus on is just that flexibility and allowing them to find something they can be passionate about.”

Leadership shaped by the front lines

Henley’s staffing philosophy is rooted in firsthand experience. Her own healthcare career started not in the C-suite, but in the operating room and emergency department. Over the years, she worked as a CNA, scrub tech, ER tech, phlebotomist, and ward clerk—mopping floors and cleaning rooms long before she stepped into a leadership position.

“I've literally done every job in a facility at one point or another,” she said. “That makes it interesting when people go to talk to me.”

That history pays dividends when leading by example. Henley recalled an instance when there was a facility merger and rooms needed to be cleaned, but housekeeping was booked. “I said, ‘Hey guys, we know how to clean the room. I've done this before.’ So I literally put on scrubs, went down and did it for them to show that it takes the village to make all of this work.”

That moment, she noted, helped reinforce to her staff that leadership is shared and that culture matters.

Strategic independence

Unity’s success in workforce development highlights a critical point for other rural hospitals: resilience doesn’t always require large-scale investments, but can instead be achieved by having deep community roots, flexibility, and leadership that understands the day-to-day.

For Henley, it starts with rethinking what it means to be independent. “To be independent does not mean you have to be alone,” she said.

Unity maintains partnerships with larger organizations for specialty care and shared services. For example, the hospital this week announced a clinically integrated alliance with Ascension Saint Thomas to expand specialty services like cardiology, neurosciences, and women’s health, while increasing access to telemedicine services like telestroke.

Meanwhile, the workforce model remains local. Henley encourages her peers to invest in long-term pipelines and to meet talent where they are.

She said: “If you can get involved with the schools, if you can work to develop those relationships with the colleges, you're going to secure your workforce.”

The company reported a quarterly loss as it prepares to be acquired and transformed by the private equity firm.

Better-than-expected fiscal results in the third quarter couldn’t keep Walgreens from swinging to a loss for the period.

Strong retail pharmacy and international growth helped buoy earnings, but continued weakness in front-of-store sales kept investor sentiment in check as the company inches closer to being taken private by Sycamore Partners.

Sales for the quarter reached $39 billion, up 7.2% year-over-year and ahead of analysts’ expectations. That momentum was largely powered by its U.S. retail pharmacy business, which saw revenue grow 7.8% to $30.7 billion, while the company’s international segment also achieved nearly 8% growth to $6.2 billion.

Still, profitability didn’t follow as Walgreens reported a net loss of $175 million, a fall off from the $344 million surplus experienced in the same period last year.

The U.S. healthcare segment, which includes the company’s investments in VillageMD and other clinical services, saw sales slip by $23 million to $2.1 billion, highlighting Walgreens challenges in delivering direct care. The company previously announced the closure of underperforming VillageMD clinics, which suffered a 6.5% dip in sales in the third quarter.

“Third quarter results reflect continued improvement in our U.S. Healthcare segment and benefits from our cost savings initiatives, while we continued to see weakness in our U.S. front-end sales,” Walgreens CEO Tim Wentworth said in a statement. “We remain focused on our turnaround plan, which will require time, disciplined focus and a balanced approach to manage future cash needs with investments necessary to navigate an evolving pharmacy and retail environment.”

Walgreens’ third-quarter performance comes ahead of its $10 billion sale to private equity firm Sycamore Partners, expected to close by the end of 2025. The looming transaction has created uncertainty over the company’s long-term strategy and was cited by Walgreens as a reason for suspending full-year guidance.

The upcoming privatization offers the company an opportunity for a strategic reset and will key to watch as Walgreens charts its next act.

Health services M&A remains steady to start 2025 amid concerns around valuation and regulatory scrutiny.

Mounting economic and regulatory pressures haven’t deterred health services dealmaking, which remains robust thanks to the sector’s durability and evolving investor confidence.

Growth in subsectors like behavioral health in the first quarter of the year highlights the resilience of health services, according to PwC’s U.S. Deals 2025 midyear report.

The analysis tracked the sector’s M&A activity through May 15, 2025, and found that the market announced 445 transactions, pushing the last 12-month (LTM) total to 1,265 deals, down 7% compared to 2024. The disclosed value of the deals was about $64 billion, down 8% from 2024 but marking a 2% increase from 2023.

Though only megadeal was announced in that period, the $17.9 billion price tag for the Walgreens Boots Alliance acquisition by Sycamore represented around 28% of all disclosed value.

“Other services,” consisting of contract research organizations, ambulatory surgical centers, home infusion, and medical office buildings, led all subsectors with 454 LTM deals and more than $31 billion in value.

Physician groups had the second-highest deal volume with 413, accounting for $11.3 billion in disclosed value, while hospitals had the third-highest value at $8.7 billion on 52 deals.

In hospital dealmaking, General Catalyst’s purchase of Summa Health could be a precursor to venture capital interest in acute care, PwC noted.

After cooling post-pandemic, the behavioral health space is rekindling investor enthusiasm. In the first quarter, deal flow spiked over 35% year-over-year, with autism-related deals doubling to their highest quarterly levels since 2020.

Across seven tracked public subsectors, including home health, labs, skilled nursing, ambulatory care, managed care, and acute systems, EBITDA multiples have compressed since May 2024. Managed care valuations are about 19% below last year, under pressure from rising medical loss ratios and political uncertainty around M&A pricing.

Strategies for dealmakers

Embrace deal flexibility and innovation, deploying non-traditional structures to close deals in an environment with high interest rates.

Target subsector specialization, from behavioral health to outpatient care, that aligns with regulatory trends and investor appetite.

Strengthen regulatory readiness, with strong antitrust strategies and engagement around site-neutral payment reforms.

Monitor capital sources, including venture capital for acute systems and private equity for stand-alone care assets.

Despite uncertainty, PwC offered a cautiously optimistic outlook. With private equity reserves still flush and activity holding firm, health services are poised for sustained activity in the second half of 2025.

Executives are rethinking strategies to navigate in an increasingly uncertain landscape, a new report reveals.

As macroeconomic and policy shifts continue to rattle industries across the country, healthcare decision-makers are recognizing the need for strategic change to keep up.

Economic and regulatory policies are particularly affecting leaders in health industries in comparison to executives in other sectors, according to a PwC's May Pulse Survey, highlighting the pressures facing healthcare organizations everywhere.

Whether it's providers trying to manage rising labor costs, pharma and medtech working to overcome supply chain challenges, or payers dealing with drug pricing, healthcare has been significantly impacted by the ebbs and flows taking place in Washington.

While nearly half (48%) of the 678 executives across six industries surveyed by PwC cited U.S. economic policy as a top-three reason to rethink their short-term strategies, that was the case for 61% of healthcare leaders.

Healthcare executives also gave more weight to other factors driving short-term strategy shifts in comparison to other industries, including AI and data regulations (56% to 44%), U.S. trade policy (44% to 41%), U.S. federal government spending and budget policy (37% to 35%), and corporate tax policy (34% to 33%).

The factors that resonated less with healthcare leaders than other sectors were U.S. antitrust and competition environment (24% to 31%) and climate policy (22% to 31%), with U.S. immigration policy's impact seen as even (22% for both).

In terms of most pressing concerns, health industries executives called attention to cyberattacks (90%), the uncertain macroeconomic environment (90%), margin pressure affecting earnings (85%), the complex regulatory environment (80%), and access to skilled labor (80%).

Healthcare flagged cyberattacks as a moderate or serious risk more than any other industry, reflecting how vulnerable healthcare organizations have been to recent cyber incidents that have slowed operations and led to revenue loss.

Unsurprisingly, access to skilled labor is keeping healthcare leaders up at night as workforce challenges continue to plague the industry.

"Providers face shortages as they care for an aging population with increasingly complex needs," PwC analysts wrote. "Pharma requires specialized expertise in biomanufacturing, cell therapies and regulatory compliance. While technology can improve the productivity of existing staff, mitigating some of the labor crunch, it comes with its own set of commitments like investing in change management and training. The AI wave is also driving increased demand for talent proficient in AI, machine learning and data analytics."

Healthcare executives have little choice but to adjust to combat the economic and policy volatility, which includes revising financial forecasts and budgets, implementing cost reductions, assessing tariff impacts, renegotiating supplier prices, and even reshoring manufacturing operations, according to the survey.

"To steer business through all this uncertainty, HI leaders have to stay nimble," PwC analysts wrote. "This means focusing on customers, making processes more efficient, significantly lowering cost structures and doubling down on the fundamentals of quality, compliance and cyber protection."