Healthcare’s new velocity: Are you ready?

For decades, our nation’s health systems have pursued a strategy of what I call “controlled deceleration,” which acknowledges innovation while slowing it to a pace that has preserved existing power structures. That strategy no longer works. The passage of the One Big Beautiful Bill Act (OBBBA), in combination with other powerful forces, is bringing high-velocity change to healthcare.

The Congressional Budget Office (CBO) projects reductions to federal health programs under the OBBBA will reach $1 trillion over the next decade, with an additional projected Medicare sequestration of nearly $500 billion through 2034.^a If any hospital finance leader is not rebuilding a five-year plan around the OBBBA’s impacts, they need to get started now.

The first glimmers that healthcare might be in store for rapid change came with the COVID-19 pandemic. In March 2020, telehealth adoption jumped from 11% to 46%.^b Regulatory barriers that stood for decades fell in weeks. We proved we could move fast when existentially threatened, exposing the fragility beneath the armor.

Then came the OBBBA. The armor cracked. And now, the forces driving change are flooding in — each contributing to the new velocity. Healthcare finance leaders need to take notice.

Why the healthcare industry has been so resistant to rapid change

This flood of change is wearing away the foundations of a deeply entrenched structure that healthcare organizations have clung to for decades — even as the structures supporting other industries were being swept away.

In 2011, venture capitalist Marc Andreessen, who helped finance the rise of the modern internet, wrote that “software was eating the world.”^c He was right about everything — except healthcare. Despite nearly $100 billion in U.S. digital health venture funding since 2010, the fundamental structure of the American healthcare system barely moved.^d

This wasn’t an accident. Our resistance to disruption was written into the industry’s DNA through decades of layered regulation and a deeply entrenched, labor-intensive operating model. Certificate-of-need laws, scope-of-practice restrictions, HIPAA complexity and the sheer weight of compliance requirements created a moat that even the most determined innovators struggled to cross. The playbook ran in plain sight. Our industry survived the high-velocity transformation sweeping other sectors by refusing to match it. That response is no longer tenable.

6 forces causing healthcare to yield to change

OBBBA’s passage signals the beginning of a prolonged transformation of American healthcare delivery at a velocity unlike anything we have seen. And while OBBBA will clearly prove to be a powerful catalyst for change, the industry’s impending transformation also will be driven by simultaneous pressure from multiple directions, each accelerating the others. Healthcare finance leaders can look to the following six forces to collectively bring about unprecedented change.

1 Federal policy. The current administration is systematically unwinding the financial assumptions we have operated on for decades. In addition to the impacts of OBBBA, it suspended $5.7 billion in suspected fraudulent Medicare payments, launched audits of all 550 Medicare Advantage contracts targeting billions in upcoding and began withholding Medicaid funds from states that fail to police program integrity.^e Whatever one’s view of these policies, their combined effect is undeniable: The financial model that sustained American healthcare for a generation is being compressed from Washington, and the pressure will only intensify through the end of the decade. For health system finance leaders, this means it’s likely that every capital plan, debt covenant and operating budget being pursued by their organizations is founded on assumptions Washington is now actively dismantling.

2 Big Tech. Amazon acquired One Medical for $3.9 billion and embedded healthcare into its logistics infrastructure.^f Oracle’s $28.3 billion acquisition of Cerner, the largest health IT deal in history, made clear Larry Ellison’s mission to the market in unmistakable terms: “The benefits to every patient in the world are going to be enormous. So we need to do this.”^g

Demis Hassabis and John Jumper of Google DeepMind won the 2024 Nobel Prize in Chemistry for AlphaFold, which has predicted structures of more than 200 million proteins and is accelerating drug discovery at a pharmaceutical scale.

Apple has made the iPhone a legitimate medical device and is competing for the patient’s front door and the data layer underneath it, with cost structures hospital systems cannot match.

3 Capital investment. Digital health venture investment peaked at $29.6 billion in 2021.^h Even after the correction, 2024 landed at $10.1 billion, five times the level of a decade ago.ⁱ

The largest firms are acquiring health systems outright. This capital is patient, experienced and committed for the long term. Private capital is consolidating physician groups, ambulatory assets and post-acute services around health systems. The strategic positioning math finance leaders used three years ago no longer applies.

4 Public fury. Medical debt surpassed $200 billion as of February 2024.^j More than one in three adults report delaying care due to cost.^k Public frustration is widespread and intensifying into a mandate for disruption. The lobbying shield that kept legislators aligned with the industry for a generation is weakening. Public anger now gives Washington political cover to do what industry pressure used to prevent.

5 Conflicting generational expectations. Baby boomers are flooding the system with unprecedented demand for high-acuity care at the very moment Gen Z clinicians are entering medicine with fundamentally different expectations. These early-career clinicians watched the burnout epidemic from moral injury, administrative suffocation and 60-hour weeks consume the generations before them. And they’ve rejected that reality, demanding better tools, intelligent workflows and real work-life balance as conditions of their labor. Given that labor is already more than half of a health system’s operating expense, this is a crucial concern for health system finance leaders.^l Both the demand curve and the labor supply are moving against the operating model their organizations were built on.

6 AI. Deployed, productive AI is already automating medical coding, reading radiology images, discovering drugs and predicting clinical deterioration. In place of scribes, ambient documentation can match specialist diagnostic accuracy, and chatbots can handle routine patient questions around the clock — dramatically reshaping the economic structure of healthcare delivery. This ability of AI to fundamentally challenge healthcare’s labor-intensive operating model presents the largest cost-curve opportunity in a generation. The capital allocation analysis sits with the finance function now, and it will not wait. For the first time in modern history, we are flanked on all sides by forces our industry cannot control, slow down or regulate away.

Why healthcare cannot escape this rise in velocity

Some will argue that this concern is premature. They believe the industry’s complexity makes it permanently resistant to the velocity that transformed other industries. They argue that this is old news, countering that our healthcare system’s antibodies will neutralize these threats just as they’ve neutralized every previous one.

They’re wrong, and here’s why: In the past, every wave of pressure arrived alone. Startups lacked capital depth. Capital lacked regulatory tailwinds. Technology lacked public mandate. Each force was isolated, and our immune system overwhelmed them one at a time. But today, powerful forces are coming together, all at once. We cannot fight a six-front war with the playbook we used to win individual skirmishes.

The choice: Embrace change or be swept aside

We now face the same choice that leaders in retail, media and finance faced years ago, and many answered poorly. Borders, BlackBerry and Blockbuster are just a few high-profile examples.

Today’s reality gives us two options: One that empowers us and one that leads to our demise.

Option 1: Embrace the innovators who understand you. About 15 years ago, a new breed of entrepreneurs and investors began working alongside healthcare. They have devoted years to learning the complexity of reimbursement, the reality of clinical workflows and the primacy of patient safety. They understand that healthcare demands a different kind of velocity — one accountable to patient lives. They also know that the status quo is breaking Americans: financially, physically and emotionally. They are building a path of partnership, increasing healthcare’s velocity toward change in a way that strengthens the industry.

Option 2: Resist until disruption breaks the system. If we choose resistance, we can expect that disruption will come from various sources, including Big Tech platforms that see healthcare as another vertical to optimize, politicians responding to public outrage and AI systems that are indifferent to existing workflows and the people maintaining them.

How finance leaders can actively promote future success

The temptation in this environment is to lead with financial engineering. Squeeze the cost structure. Renegotiate the payer mix. Optimize the revenue cycle. Reposition the balance sheet. This work is necessary but insufficient.

A hospital or health system carries a dual mission: To maintain sustainability under mounting financial pressure and to seek genuinely and continuously to improve how we operate for the well-being of both the communities we serve and the workforce we employ.

Financial engineering can buy time for that mission. It cannot deliver it. Finance leaders can best respond to the industry’s new velocity by adopting two primary areas of focus.

1 Become more innovative. The single most important action for finance leaders right now is to do the cultural work that allows their organizations to become fundamentally more innovative. That work shows up in how capital is allocated, with real investment in operational capabilities that create savings while enhancing the patient experience by promoting superior care. It shows up in how partnership is defined, where the right outside innovators are treated as allies in genuine change. It shows up in how the finance function itself operates, with cost stewardship joined by active sponsorship of the new operating model.

2 Operate differently. None of this happens without finance leaders giving their organizations permission to operate differently. The ones who do will define what their organizations look like in the next decade.

Time to embrace healthcare’s new velocity

Over the next 24 months, we will see more change in healthcare delivery, financing and technology than we’ve seen in the past 24 years. The organizations that survive will be those that embrace today’s velocity while maintaining values and building partnerships with visionaries who understand the industry’s constraints and mission. They need to start by believing in the power of partnerships.

But belief also requires action: They must build those partnerships, seeking people who understand healthcare and share the determination to change it.

Healthcare is facing a new velocity. The time is now. 

Footnotes

a. CBO, “Estimated budgetary effects of Public Law 119-21, to provide for reconciliation pursuant to Title II of H. Con. Res. 14, relative to CBO’s January 2025 baseline,” July 21, 2025.
b. Bestsennyy, O., et al., “Telehealth: A quarter-trillion-dollar post-COVID-19 reality?” McKinsey & Company, July 9, 2021.
c. Andreessen, M., “Why software is eating the world,” Andreessen Horowitz, Aug. 20, 2011.
d. American Medical Association, “Driving the future of health,” Oct. 31, 2025.
e. CMS.gov, “Trump Administration prioritizes affordability by announcing major crackdown on health care fraud,” press release, Feb. 25, 2026.
f. Palmer, A., “Amazon closes deal to buy primary care provider One Medical,” CNBC, Feb. 22, 2023.
g. Evans, B., “Larry Ellison’s healthcare transformation: Oracle makes biggest bet ever,” Cloud Wars, June 13, 2022.
h. Zweig, M., Kimmel, J., and Knowles, M., “2025 year-end digital health funding overview: A tale of two markets,” Rock Health, Jan. 12, 2026.
i. Landi, H., “Digital health venture funding hit $10.1B in 2024 as investors focused on earlier-stage dealmaking,” Fierce Healthcare, Jan. 13, 2025.
j. Rakshit, S., et al., “The burden of medical debt in the United States,” KFF, Feb. 24, 2024.
k. Sparks, G., et al., “Americans’ challenges with health care costs,” KFF, April 30, 2026.
l. American Hospital Association, The Cost of Caring: Challenges Facing America’s Hospitals in 2025, April 2025.