Hospital finance leaders zero in on capacity optimization + workforce effectiveness as margins remain thin

Hospitals and health systems continue to operate under intense financial pressure, with little relief in sight. Labor costs remain stubbornly high, reimbursement uncertainty continues to cloud planning and operating margins remain historically slim. In response, finance leaders are recalibrating their priorities — shifting away from broad transformation efforts and toward practical, near-term strategies that can protect margins and sustain operations.

To better understand how finance leaders are navigating this environment, Becker’s Healthcare and LeanTaaS surveyed chief financial officers and senior finance executives from U.S.-based hospitals and health systems. The findings paint a clear picture of an industry bracing for prolonged financial strain and increasingly turning to capacity optimization and workforce effectiveness as the most realistic paths to resilience.

Survey overview

The Becker’s-LeanTaaS survey was recently conducted among 100 hospital and health system finance leaders, including CFOs, vice presidents of finance and directors of finance. Respondents represented a range of organization types, with nearly half (46%) working at health systems and 37% at community hospitals. Additional respondents represented nonprofit organizations (11%), academic medical centers (5%) and rural hospitals (1%).

Organizations of varying sizes were represented. Nearly two-thirds (64%) of survey participants work at hospitals or systems with a flagship facility of more than 300 beds, including 34% from organizations with more than 500 beds and 30% from those with 301 to 500 beds.

Thin margins are the norm — and many organizations are worse off than a year ago

Operating margins remain under significant pressure for most health systems. Nearly three-quarters (72%) of finance leaders describe their organization’s current operating margin as thin (1–2%) or worse (<1%). While 26% report that margins have improved compared to the prior year, those gains are modest, with margins still stuck in the 1–2% range. Another 24% say thin margins have become the “new normal,” while 22% report margins have worsened to below 1%.

These findings underscore a sobering reality: even organizations that have stabilized financially are operating with little margin for error, sharpening the focus on strategies that deliver measurable financial impact without requiring outsized capital investments.

Reimbursement and policy volatility dominate financial concerns

When asked to identify the most significant financial pressures facing their organizations, Becker’s-LeanTaaS survey respondents overwhelmingly pointed to reimbursement challenges and policy uncertainty. Consistent with broader industry trends, leaders most frequently cited declining reimbursement rates or unfavorable payer mix as their top concern, followed by reduced federal or state funding, grants or subsidies, and heightened regulatory and policy risk.

At the same time, inflationary pressures and rising labor costs continue to erode financial performance, making labor expenses — particularly overtime and productivity — a key priority for the year ahead.

Underutilized capacity and labor inefficiencies emerge as critical levers

Despite these challenges, finance leaders also see opportunity. Underutilized capacity and workforce inefficiencies rank among the most actionable levers for financial improvement.

When asked about their top financial priorities, Becker’s-LeanTaaS survey respondents pointed most frequently to initiatives tied directly to workforce and capacity performance. The top three priorities cited were workforce scheduling and reducing overtime (77%), technology investments to enhance capacity and workforce utilization (65%) and improving labor productivity and operational efficiency (56%).

Rather than expanding physical footprint or adding staff, finance leaders are increasingly focused on making better use of the capacity and workforce they already have.

Capacity optimization is firmly on the CFO agenda

The survey makes it clear that capacity optimization is no longer an operational side project — it is a strategic finance priority. Nearly two-thirds (65%) of respondents rate capacity optimization as a high or extremely high priority, including 43% who say it is a high priority and 22% who categorize it as extremely high.

This level of emphasis signals a broader shift in how finance leaders view capacity management. Optimizing throughput, aligning staffing with demand and reducing idle or bottlenecked capacity are increasingly seen as core drivers of financial performance, not just operational efficiency.

Technology investments are unlocking capacity — and moving quickly into action

Finance leaders are approaching technology investments with a clear operational focus. Nearly two-thirds (65%) ranked technology aimed at improving capacity and workforce utilization among their top financial priorities for the coming year, signaling a shift away from experimentation and toward solutions with direct impact on scheduling, staffing, demand management and throughput.

These investments are already moving from strategy to execution. More than half of respondents (56%) say they are very or somewhat confident in their ability to sustain technology investments despite ongoing margin pressure. At the same time, nearly two-thirds (64%) report that AI-enabled operational solutions are already implemented (19%), being piloted (29%) or planned within the next 12 months (16%), underscoring growing momentum around data-driven approaches to addressing labor inefficiencies and underutilized capacity.

A pragmatic path to financial resilience

Taken together, the findings point to a pragmatic shift in strategy among hospital and health system finance leaders. With margins unlikely to rebound in the near term, leaders are prioritizing operationally grounded approaches to financial resilience — particularly those that improve workforce effectiveness and unlock existing capacity.

As reimbursement uncertainty and labor pressures persist, organizations that can better align staffing with demand, reduce inefficiencies and leverage technology to optimize operations will be best positioned to weather ongoing volatility.

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