The proliferation of claims denials, especially by Medicare Advantage payers, has become a pressing issue for health system operations.

The balance sheet serves three main purposes: as a shock absorber, financing mechanism, and profit center. By examining and engaging the full range of opportunities that balance sheet resources can contribute, organizations can enhance their long-term sustainability.

Hospitals seeking funds for capital needs are facing several challenges, which is driving interest in non-traditional financing structures, often involving real estate. Synthetic leases are one alternative, but they require a careful assessment of both their benefits and considerations that may make them a less attractive option.

As hospitals and health systems respond to the challenges and opportunities of a stabilizing but still challenged market environment, their strategic and financial plans will inevitably change.

Despite overall industry improvements for not-for-profit health systems, the divide between stronger and weaker performers continues to increase. Other challenges to the sector include the still-challenged labor market, the continued difficult payer environment and potential policy changes from the new Trump administration.

Five key steps health systems should consider implementing to improve their observation management strategies and ensure appropriate reimbursement.

Health plans interested in inorganic growth should reflect deeply to better understand their motivations as it relates to their strategic goals.