The One Big Beautiful Bill and 5 key takeaways for expense management

The One Big Beautiful Bill (OBBB), signed into law on July 4, 2025, introduces sweeping changes to Medicaid eligibility and financing, ACA tax credit eligibility and other provisions that, when taken together, are projected to decrease healthcare coverage and increase bad debt for hospitals and health systems. All providers will be affected, with the degree of disruption varying widely across and within states.

For C-Suite and expense management leaders, this signals an urgent need to tighten margin control and proactively identify ways to do more with less — exploring ways to optimize costs, bolster revenue and engage AI tools to streamline and improve operational processes.

1. Optimize costs: Now is the time to focus on optimizing purchasing and administrative workflows to protect margins. Improve performance upstream by standardizing products, avoiding waste and keeping accurate recordkeeping to directly support revenue cycle accuracy and reimbursement. Employ ongoing monitoring and adapt as needed to sustain improvements. Consider where to optimize portfolios and build relationships collaboratively by seeking long-term, strategic partnerships that create mutual value.
2. Be strategic with financial planning: Align expense management goals with health system strategy and use scenario planning to assess risk. Health systems must develop a clear enterprise strategy that encompasses supply chain and prioritize revenue generating opportunities such as specialty pharmacy.
3. Evaluate existing ambulatory strategy: Ambulatory surgery centers and other options can deliver higher margins with added convenience for patients, but only if cost structures are appropriately adapted. Ambulatory sites are focused on lower case complexity but higher turnover and same-day utilization, which means they require a leaner, faster and more tailored supply chain model. Consider the cost implications physician preference items and specialty pharmaceuticals may have on ambulatory sites and determine if those implications align with the overall system’s financial goals. Keep in mind potential site neutral payment policies may bring an added dynamic in the coming months.
4. Educate and advocate: Keep an eye on new care and reimbursement models and educate policy makers about how policies affect hospital costs, supply chains and patient care. Staying close to state and federal legislators can help ensure local implementation of legislation aligns with the health system’s operational and financial realities and goals.
5. Consider artificial intelligence: AI and new automation tools offer enormous potential to health systems and must be part of the answer. For expense management, AI can be a helpful tool used to increase efficiency, reduce waste and assist with decision-making. It can analyze utilization patterns, identify unnecessary variation and standardize products systemwide. It also can help with procurement and processing, streamlining workflows and cutting costs. But there must be governance and oversight.

For C Suite and executive leaders in supply and expense management, the call to action is clear: restructure how costs and inventory are managed, tightly align sourcing strategies, utilize artificial intelligence with clear governance and put financial resilience at the core of strategic planning.

Connect with us today to talk to a trusted advisor that can lead you through your personalized options.