Laura Dyrda

Michael Charlton, president and CEO of AtlantiCare, welcomed CMS Administrator Mehmet Oz, MD, to New Jersey last week for a tour of medical facilities and healthcare policy discussion.

Dr. Oz visited AtlantiCare’s medical and educational facilities, as well as community outreach sites in an effort to showcase the system’s healthcare delivery, education and innovation services. He also joined a private roundtable including healthcare, government, education and technology leaders to discuss the future of Medicare and Medicaid.

“I was pleased to join leaders from healthcare, education, government and technology at AtlantiCare for a thoughtful and solutions-driven conversation,” said Dr. Oz. “AtlantiCare’s vision is transformative for the city of Atlantic City and approach that other health systems could model.”

Leaders at the roundtable discussed:

Prior authorization

Care delays

Provider burden

Technology opportunities

Regulatory issues

The conversation comes at a particularly important time, as the One Big Beautiful Bill Act passed earlier this month includes Medicaid cuts phased in over the next two years, draining resources for hospitals with a high percentage of Medicaid beneficiaries.

CMS also released plans to phase out the inpatient-only list over the next three years and expand site neutral payments. At the same time, the agency is accelerating a repayment plan to claw back $7.8 billion in overpayments made for 340 B non-drug services.

During the sessions, AtlantiCare’s leaders described how important the health system is to the community. AtlantiCare’s expansion in the region has driven economic revitalization and regional growth, according to a system press release.

“AtlantiCare is small enough to be nimble in our transformation efforts, yet big enough matter and make a real difference,” said Mr. Charlton. “That’s what allows us to move fast, build partnerships that matter, and create real outcomes. [Friday’s] discussion made clear how important it is for national policy to stay grounded in what’s actually happening on the front lines.”

The health system has a six-year strategic plan to transform care delivery with community investment, workforce development for 6,500 team members, clinical innovation and operational growth.
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Joon Lee, MD, joined Atlanta-based Emory Healthcare as CEO in 2023 and since then has engineered a financial turnaround, reorganized leadership to become a more cohesive organization, and oversaw the transformation of the first Apple-powered hospital.

Now, his role is expanding. Dr. Lee became executive vice president for health affairs of Emory University and vice chair of the Emory board of directors on July 1, responsible for the health science center’s research, training and innovation.

“It’s a natural progression. We believe it equips us better to deal with the current environment,” said Dr. Lee. “If you look at academic health systems across the country, there are hundreds of different formulations between the medical school component, faculty and healthcare deliveries, hospitals and physician practices in how they work together.”

Emory’s hypothesis is that alignment will create a virtuous cycle and fertile environment for innovation in basic science and care delivery. Dr. Lee envisions a significantly enhanced patient experience as Emory’s integrated model accelerates care coordination, digital transformation and personalized service across the organization..

“The reality is academic health systems in this country are complex, with the tri-partite mission of education, patient care delivery, innovation and research. It’s multifaceted and interdependent,” said Dr. Lee. “Our organization now has more than 30,000 people, and we aren’t even the largest in the country. How do we organize ourselves and ensure decision-making within the system is aligned as possible? By combining these roles, we can create the decision-making system for resource allocation, investing and creating the structures of the organization that will let us align to achieve our goals.”

Dr. Lee believes the leadership structure will allow his team to quickly consider all implications of changes and make better decisions. Under the previous structure, siloes made it harder for leaders to work together.

In addition to Dr. Lee’s expanded role, the system named Christopher Augostini. executive vice president of business administration for Emory University and CFO for Emory Healthcare and Emory University, as Emory’s new executive vice president and enterprise COO.

“The fact that we have a high-performing leadership team and operational side of healthcare all delivery allows us to come together even more within the physician leadership and academic leadership to make sure we’re as coordinated as possible,” said Dr. Lee. “It creates synergy. Our world is complex enough. How can we come together and structure leadership to minimize the complexity? I believe that’s where we are in terms of that trajectory and momentum makes this the right thing to do.”

Emory already has a legacy of innovation and recently upgraded its Emory Hillandale Hospital as the first Apple-powered hospital in the nation. The community hospital is testing grounds for expanding the technology and reflects a broader model of innovation for smaller hospitals.

“Breaking down the artificial barrier of where academic innovation starts and stops versus community-based innovation is important. We are really interested in innovation in care overall,” said Dr. Lee. “Those have to mesh – basic science is a broad spectrum, but health systems should be able to tie those together. Academic health systems exist to invest in innovation.”

The strategic decision to unify Emory’s leadership structure is also paramount to financial stability.

“The organizations that create a more aligned decision-making structure between the schools, research efforts, training and healthcare delivery, whether it’s still a corporation or private entity, will have more alignment around where to invest resources and create efficiency,” said Dr. Lee. “If you look at AMCs’ performance across the country now versus 15 to 20 years ago, the dispersion of high versus low are much broader now, due to the competition, volatility and the systems that are unable to align and create an efficient integration are going to struggle, because the competition from outside academics is getting stronger.”
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Bill Gassen, president and CEO of Sioux Falls, S.D.-based Sanford Health, was named chair-elect designate of the American Hospital Association, representing around 5,000 hospital members. He is now in line to become AHA chair in 2027.

“It’s an incredible honor to be named chair-elect designate of the American Hospital Association,” Mr. Gassen said in a news release. “This is a pivotal moment for health care in our country, and I’m grateful for the opportunity to serve and help carry forward the AHA’s strong legacy of advocating for hospitals and health systems across rural, urban and suburban America. I’m committed to ensuring our members’ perspectives are heard – and that we stay focused on forward-looking strategies to strengthen care delivery and improve the health of the communities we serve.”

Mr. Gassen became CEO of Sanford Health in 2020 and has dedicated the last five years to transforming rural healthcare for the system’s more than 2 million patients and 425,000 health plan members. He launched a $350 million virtual care initiative in 2021 to improve access to care and is adding 15 residency and fellowship programs to strengthen the pipeline of rural healthcare providers.

Before stepping into the CEO role, Mr. Gasson was chief administrative officer, corporate counsel and chief human resources officer. He is an AHA Board of Trustees member and sits on the board of Oscar Health.
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Rural healthcare facilities across the U.S. are struggling to survive. Much of the funding they relied on for years is disappearing without a clear path forward, and the One Big Beautiful Bill Act threatens to further reduce directed payments for Medicaid beneficiaries.

As margins tighten, rural healthcare leaders are searching for innovative solutions and partnerships. Tom Vasko saw that need three years ago when he became CEO of 25-bed, Shattuck, Okla.-based Newman Memorial Hospital, and dove right in.

“I knew in order to rebirth the 105-year-old legend of Oklahoma, we needed to take a for-profit approach with a nonprofit mindset,” he told Becker’s. “This novel approach would position the organization for resistance, strain and ward off closure. Given the circumstances, we will become more aggressive with a sense of urgency, accuracy and competitiveness. Newman will continue to be progressive. We must continue to gain top line revenue creating the opportunity for higher levels of cash flow to remain liquid.”

If rural hospitals can remain profitable, they will be able to invest in service line growth and updated infrastructure. Mr. Vasko aims to invest every dollar of positive cash flow that comes in right away to make upgrades instead of waiting for the year’s end.

“We have to reinvest and buy clinics, buy real estate, and then there’s a ramp up period. That’s a big challenge right now with OB and labor and delivery,” he said. “It’s not about just turning on the lights; it’s a lot more complex than that. You typically ramp up and it’s a very intimate relationship between the patients and providers. There has to be some dollars behind that in order to compensate for a loss temporarily until you can start sharing a profit when your volumes get to where they need to be and reimbursement kicks in.”

Mr. Vasko sees the hospital’s partnership with boutique data analytics and AI firm as critical to success, and will focus on expanding its primary care footprint via partnerships and acquisitions. Those primary care physicians will help identify patients with advanced disease states who need specialty care, which Newman can offer.

“You have to be really attuned to your finances as well as really rely on your data and listen to your team to make sure that your leadership team is the right people,” he said. “Truly listen to their ideas and apply them, and give them autonomy to implement those ideas.”

One early success story has been Newman’s orthopedics practice. The practice takes a concierge approach to medicine, which reversed the outmigration of surgical patients. Now, the hospital draws patients from Oklahoma City – two-and-a-half hours away – to receive orthopedic surgery.

“This reversal approach has contributed to community benefit and driven local economic impact for our community business,” said Mr. Vasko. “In late 2025 and throughout 2026, Newman will advance its orthopedics practice partnering with nationally recognized surgeon Dr. Manish Patel from Virginia. Pioneers within orthopedics will draw national patronization to the small rural hospital.”

In the last four months, Newman has created a model of partnership and forged deep provider relationships to gain a strong referral base and ancillary revenue.

“We’ve added the opportunity to gain an uptick of 24,000 patients visits annually,” said Mr. Vasko. “We’ve launched two additional primary care clinics and a specialty clinic in continuous countries to capture the patient base and legitimize our presence and geographic footprint.”

The hospital is also investing in its brand and creating an omnichannel advertising strategy to attract more patients and finding new ways to improve the patient experience.

“We can’t just sit still in between our four walls and keep a chair warm,” he said during an interview with Becker’s Healthcare podcast. “We have to be transformational CEOs, and that’s what I’ve coined myself. I’m not a hospital CEO. I’m a transformational CEO that has to bring and drive change with innovation and novel ideas and create high functioning teams that feel welcome to bring ideas to the table to drive the organization forward.”

Newman faces big challenges over the next few years, with 18% of patients having Medicaid and 60% having Medicare. The hospital, which serves a county that has a 15.4% poverty rate, stands to lose money on both. Statewide, 97 hospitals in Oklahoma have negative operating margins and many are wringing their hands. Not Mr. Vasko.

“Simply sitting flat footed, remaining between four walls will result in certain death for any rural facility,” said Mr. Vasko. “Over the last three years, I’ve applied more private equity and for-profit tactics with respect to liquidity and growth than ever seen in a nonprofit environment. I’m grateful these strategies are prevalent in past experiences. It’s been the defining factor in our ability to exist.”
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Hospitals are integrating artificial intelligence into operational and clinical workflows, boosting the patient and employee experience. Technology is also making hospitals more efficient and improving outcomes.

C-suites are setting the tone for strong governance to select the right AI-driven products and applications while ensuring patient data safety and guarding against harmful hallucinations. But question marks remain as leaders look into the future.

“For clinicians, AI is on the peripheral right now and even though it may be part of their workflow already, it’s something they often see out of the corner of their eye and it’s scary. They have a lot of questions about what it means for their future and what their jobs will look like,” said Nadim Ilbawi, MD, system medical director – innovation and care model redesign at Endeavor Health in Evanston, Ill. “From a system level, the question is the investment in resources, when and the pacing of implementation. You want to be an early adopter of a lot of things, but do you want to be an early adopter in this space?”

There are still so many unknowns about AI’s dependability and future evolution. The technology is constantly sharpening and new evolutions can do amazing things, but also come with risks. Leadership teams are finding their identity within the tight AI innovation cycle.

“Do you want to go and look over the ledge and see if there is something amazing there, or do you risk falling off?” said Dr. Ilbawi. “That’s really the balance for leaders, and I think it’s a tough one. They are asking themselves how early to invest and what to invest in.”

Many investment decisions boil down to the potential return. Health systems are willing to begin a pilot and if it works, scale it. They’re looking for technology to ease the burden on clinicians and save financial resources long term.

Bill Sheahan, senior vice president and chief innovation officer at MedStar Health in Columbia, Md., sees trust and adoption of AI still variable among clinicians, even for technology such as ambient documentation. Some clinicians describe the technology as “life changing” while others refuse to adopt it.

“We could have two providers of the same specialty in the same practice environment, and you give it to both of them and one uses it and one does not. In some cases, that’s because they’ve really optimized their existing workflows, and they’re already highly productive and have good well-being,” said Mr. Sheahan. “We need to understand that better. Those are questions we need to ask to really understand what drives adoption across different parts of our population, of employees and clinicians.”

There are still many discussions about potential risk, medical malpractice and compliance as AI creeps further into everyday processes. Existing governance helps mitigate the risk, but AI introduces a new set of challenges.

“You can imagine AI summarizing a very long and complex chart, and that highly complex patients are being transferred in for care to tertiary and quaternary centers have hundreds of thousands of pages of material that are sent with them, and that’s unrealistic to expect that in our current environment providers are digesting that much information as they are caring for those patients, or hunting and pecking within all of those records to find the right tidbit of information in the moment,” said Mr. Sheahan. “We would all agree at that moment, it’s better to have an AI helping to find information and summarize it from those thousands of patients. We have to really carefully understand this risk and choose wisely to help overcome some of the risk that is inherent in the analog system of care that exists today as we look to implement new solutions.”

AI needs human monitors to ensure quality control and evaluate performance. Hospitals are beginning to put systems in place for their human workforce to manually check or review historic retrospective performance for AI, including ambient documentation and scribing, to mitigate risks. But that isn’t a scalable solution.

“We have artificial intelligence embedded across the entire decision-making fabric of our organizations. How can we measure and validate the quality of the AI that is going?,” said Omkar Kulkarni, chief transformation and digital officer at Childrens Hospital Los Angeles. “That is going to be really interesting and challenging. It’s going to be reliant on risk stratification and that’s something we need to figure out. Because ultimately, the analysis I give these days is, I’m so reliant on my car beeping when there’s somebody in my blind spot that I rarely turn my head over by shoulder like I should be. There’s a potential, whether it’s with AI scribing or something else in the AI space, that we become reliant on the AI because we know the quality is good, but obviously the consequences in healthcare are significant and much higher if the risk isn’t mitigated.”

Finally, there are questions around cost. It’s still early in the technology evolution and many organizations are keeping an eye on how prices for AI-driven solutions fluctuate.

“There is a limit to how much health systems can spend, and while we’ve been promised historically about the ROI of digital health technologies, you could argue that the ROI has not always been achieved,” said Mr. Kulkarni. “There’s definitely a lot of promise for AI, and will that outweigh the sizable cost and investment we’re all going to have to make in it, just like the digital front door or telehealth? There’s been a lot of game-changing moments in technology and healthcare over the last few decades and we’ve made investments with the ROI often being there, but not always.”
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