The third annual U.S. Hospital Operations Outlook Survey conducted by FTI Consulting underscores the reality facing hospital leaders: 2026 is shaping up to be a year defined by policy uncertainty, particularly as provisions of H.R. 1 (One Big Beautiful Bill Act) begin to take effect.

FTI Consulting surveyed more than 200 leadership-level decision makers across academic medical centers, health systems, and standalone hospitals nationwide. Respondents pointed to a range of interconnected pressures affecting their organizations, including policy-related financial impacts, workforce burnout and recruitment challenges, and rising technological demands.

A quarter of the way into the year, leaders are already navigating a more complex and less predictable policy environment at both the state and federal levels. Changes to Medicaid financing, including projected funding reductions and increased scrutiny of provider taxes and state-directed payments, are converging with ongoing pressure tied to site-neutral payment policies and evolving Medicare Advantage dynamics. Together, these shifts are creating new financial headwinds at a time when many hospitals are still working to stabilize margins following the pandemic.

The scale of this concern is reflected in the data. Projected federal Medicaid funding reductions of nearly $1 trillion over the next decade – one of the most significant proposed reductions to the program in decades — are expected to have a significant impact on hospital operations, with 92% of hospital leaders anticipating major or moderate effects on financial performance. Stricter Medicaid eligibility requirements and changes affecting Medicare Advantage reimbursement are the most frequently cited policy concerns, each identified by 61% of respondents.

What makes this moment distinct is not just the presence of policy pressure, but its magnitude and concentration. Medicaid represents a meaningful share of the hospital economy, accounting for roughly one-fifth1 of all hospital spending nationally, and an even greater share for hospitals serving rural and safety-net populations. Changes to coverage, eligibility, and reimbursement are now occurring simultaneously rather than in isolation, creating a level of financial exposure that is both broader and more immediate than in prior periods.