Healthcare affordability and financial sustainability concerns test CFO strategy

Healthcare stakeholders can implement strategies that improve both affordability for consumers and financial sustainability for providers, according to insights from a recent panel discussion.

The effort should start with “making sure that we understand what this balance is of financial sustainability of the institution and affordability for the patients, for the consumers, for the communities that we serve,” said C. Ann Jordan, president and CEO of HFMA.

Through its Vitalic Health initiative, which strives to advance affordability, financial sustainability and better health outcomes in U.S. healthcare, HFMA is providing guidance on how the industry can strike that balance.

At last month’s Not-for-Profit Healthcare Investor Conference, hosted by HFMA, Barclays and the American Hospital Association, Jordan moderated a panel discussion featuring Dennis Dahlen, CFO of Mayo Clinic; Robin Damschroder, president of value-based enterprise and CFO at Henry Ford Health; and Kevin Smith, CFO of SSM Health.

Following are some of the panel’s key takeaways on how the industry can meet the moment.

Taking stock of affordability

Surveys conducted by HFMA hint at rising recognition of the core challenges facing the industry.

In a 2025 survey, only 17% of CFOs said they were fully committed to addressing affordability in the next three years. More recently, in a Vitalic Health survey to be published June 8, all responding healthcare leaders said their organization is compelled to work on affordability.

The shift might stem from differences in the surveyed groups and how the questions were phrased, but it also reflects the sentiment seen in public opinion polls. Healthcare increasingly is likely to top lists of affordability concerns, rivaling the surging price of gas.

Stakeholders are “seeing there is this obligation coming that the public is starting to bring to their attention at greater volume,” Jordan said. “I do believe that the conversation is being elevated and accelerating.”

Assessing the path forward

Balance sheet strength is a key factor for organizations considering long-term sustainability strategies, Smith said.

Health systems on a strong footing “could think about this as a marathon, even although your short-term income statement may be depressed a little bit,” he said. “If you don’t have that, then you may need to think about, ‘How do I partner with other organizations to be able to get that short-term situation in check, so I can look forward to the long term?’”

Board support is vital to ensure the organization can accept “smaller margins on the front end,” Smith added.

Reimagining care delivery models

Hospitals and health systems can bolster affordability and financial sustainability via strategic approaches, the panelists said.

For example, site-of-care strategies could entail moving outpatient surgeries to ambulatory surgical centers (ASCs), as appropriate. If volume can be transferred to ASCs, hospitals can repurpose OR space, said Damschroder.

At Henry Ford Health, “We’re really looking at how does it create the opportunity to make the best hospital of the future,” she said.

Smith recalled lessons from a career stop as a finance leader in Maryland, where hospitals are paid under an all-payer global budget model. The experience clarified that hospital volumes should have a certain level of acuity.

 “I try to think about ensuring that we have a high CMI [case mix index] in the four walls of our hospital and lower-acuity services at ambulatory surgery centers, urgent care, physician practices, virtual care,” Smith said.

Of the patients seen by one orthopedic surgeon at Henry Ford Health, only 8% need surgery, Damschroder noted.

“That number needs to be higher,” she said.

Achieving a more streamlined system

Amid estimates that healthcare administrative waste amounts to more than $265 billion in costs per year, slashing a portion of that would save substantial systemic costs.

“Before we talk about cutting eligibility or benefits, we ought to wring the administrative waste out of the system,” Damschroder said.

Improved standardization is one key to rooting out waste.

“Healthcare in the United States is very far behind in terms of standards, and so what AI is capable of doing from the administrative side really can’t see its full potential until that happens,” Jordan said.

In clinical operations, precision medicine based on increasingly sophisticated population health data modeling allows care teams to quickly “stick the landing” on effective treatments, said Dahlen.

That benefits the patient and is “also great for the system, because you don’t waste a lot of cost, time, whatever else on the [treatments] that won’t be effective,” he said.

Addressing societal factors

The panelists linked affordability and sustainability efforts to realigning incentives and confronting behavioral and societal drivers.

For example, even though the U.S. healthcare system ranks notoriously poorly in costs and outcomes, Damschroder said it may go overlooked that specific drivers in that performance are gun violence and suicide.

An underlying consideration thus becomes how the system values and funds preventive care, including in behavioral health, and whether those measures are made available broadly or only to people who can afford them.

“One of the things that has been a constant in my nearly four decades of working in healthcare finance is that we follow the incentives,” Dahlen said. “We sort of tiptoe around that, but I think we’re going to have to, as providers, embrace that change to the extent we can.”

However, there also should be a societal recognition that healthcare is not free.

“There is a cost to it, all of the caregivers, all of the technology,” Dahlen said. “We’ve got to figure out how to pay for that, and that includes probably some personal responsibility.”

Telling the story

Hospitals should seek to have a collective voice through organizations such as HFMA, Smith said. There should be a move from defense to offense on discussing issues such as affordability.

“There is no unified national voice of large health systems,” Dahlen said. “We end up being a victim of the worst actor among us.”

Better transparency can help, Damschroder said, citing the benefit of describing how large systems use savings from the 340B Drug Pricing Program.

“Make sure you’re out there telling your story about what you are doing with those 340B dollars,” she said. “Don’t keep it hidden. We do so many good things and we don’t talk about it.”

Similarly, hospitals should see the opportunity in IRS rules requiring them to issue community benefit reports, Damschroder and Smith said.

A goal of Vitalic Health is “to do that storytelling and bring that connectivity between affordability and financial sustainability,” Jordan said. “One needs the other.”