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Healthcare organizations face an increasingly complex risk landscape as economic pressures, operational challenges, technological advancements, and changing stakeholder expectations continue to reshape the industry. As exposures evolve, leaders must remain vigilant in identifying emerging risks, strengthening resilience, and implementing proactive strategies to reduce the frequency and severity of loss events. Organizations that take a forward-looking approach combining effective risk management, strong governance, workforce support, and operational preparedness will be better positioned to protect patients, employees, and financial performance while navigating ongoing uncertainty. In this article, we’ll outline the rising exposures and how businesses can prepare for, and protect themselves, from these issues.
AI/Telehealth (emerging)
Environmental
Financial/Reimbursement
Regulatory compliance
Malpractice liability
Workforce (shortage/violence)
Cybersecurity
Risk Level (2026) Very High
Trend Rapidly increasing
Trend Structural long-term
Risk Level (2026) High
Trend Increasing severity
Trend Tightening enforcement
Trend Margin compression
Risk Level (2026) Moderate
Trend Stable but regulated
Trend Fastest growing
Heatmap for rising exposures in US healthcare
2026 Healthcare Market: Exposures and Trends
Trends
Challenges
Cyber risk and data breach Healthcare remains highly exposed to cyber threats and data breaches, with approximately 700–750 major breaches reported annually (around two per day) and around 47 incidents per month recorded from late 2025 to early 2026. While breach frequency has stabilized, the scale of impact remains severe, with around 289 million individuals affected in 2024 and around 61.6 million in 2025. Most breaches (75–80%) stem from hacking and ransomware attacks, reflecting increasing vulnerability due to digitalization, interconnected systems, and high‑value patient data, making cybersecurity a critical operational risk.
Cyber incident highlights for 2026: The healthcare sector reported 46 data breaches year to date in 2026, with healthcare providers (78%) accounting for the majority, underscoring persistent vulnerabilities at the frontline of care delivery. Business associates and health plans contributed to a smaller share of incidents, but third-party exposure remains a significant supply chain risk, as highlighted by the major TriZetto Provider Solutions breach, which affected 3.43 million individuals due to a hacking/IT incident. Regulatory enforcement intensified, with the Office for Civil Rights (OCR) closing 11 investigations related to hacking and HIPAA risk failures, which resulted in substantial financial penalties for multiple entities, including Assured Imaging ($375,000), Axia Women’s Health ($320,000), and Star Group Health Plan ($245,000). Additional penalties ranged from $10,000 to $103,000, and state-level enforcement was evident, with Comstar LLC fined $515,000 by the Attorneys General of Massachusetts and Connecticut, reflecting growing accountability for data protection failures across the healthcare ecosystem.
Rising data breaches in healthcare highlight growing vulnerabilities and the severe impact of cyberattacks, including financial losses and regulatory penalties. This trend is driving healthcare organizations to adopt better risk management strategies, often enlisting the help of experts, and ensure that partners are able to navigate complicated claims landscapes post-events.
Read More
Top 5 Cyber Threats in 2026
TYPE OF EXPOSURE
Contents
Environmental liability Healthcare facilities in the U.S. face significant environmental exposures, including pollution from building materials, hazardous and medical waste, mold, legionella bacteria, and fuel or chemical spills. These risks are heightened by aging infrastructure, construction projects, and acquisitions. Standard insurance often excludes pollution-related incidents, making specialized coverage and proactive risk management essential for protection. Healthcare facilities must also address regulatory compliance for hazardous materials, medical waste, and storage tanks, as well as implementing best practices for mold and legionella control to safeguard patients and staff.
Legionella article
GB Healthcare: We Expect The Unexpected
Malpractice liability Medical liability trends show a decline in lawsuit frequency but rising severity and cost pressures. According to 2026 statistics, medical malpractice claims against hospitals represent around 15% of all malpractice payouts annually, with an average settlement of $329,565. At the same time, claim severity is escalating sharply, driven by “nuclear verdicts.” Large verdicts exceeding $10 million against hospitals have increased by 20% since 2010. Birth injury claims result in the highest median payouts of any hospital litigation category, while diagnostic errors are the leading cause of hospital lawsuits, accounting for 33% of claims. Source: Hospital Lawsuit Statistics | 2026 Market Report
Regulatory compliance U.S. healthcare organizations face multi-layered regulatory exposures beyond HIPAA, increasing overall compliance risk. Key exposures include Medicare/Medicaid billing and fraud risks (FCA), where improper coding or claims can lead to significant penalties and audits, and anti-kickback/Stark Law violations, often resulting in multimillion‑dollar settlements. Additionally, quality- and value‑based care regulations can reduce reimbursements for poor outcomes, while cybersecurity and data privacy mandates heighten enforcement and breach‑related penalties. Emerging exposures include telehealth compliance, interoperability mandates, workplace safety, and environmental regulations, creating interconnected financial, legal, and operational risks across healthcare systems. Preventive measures to ensure workplace safety standards are understood and enforced can help reduce safety incidents and protect employees and patients. This includes not only physical hazards but also environmental hazards that are prevalent in healthcare facilities. Source: AHA
Top Workers' Compensation Claims in Healthcare
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Financial/reimbursement U.S. healthcare reimbursement trends show intensifying financial pressure, driven by rising costs, stricter payer behavior, and declining collections. Hospitals are experiencing higher claims denials, with clinical denials increasing due to prior authorization and medical necessity requirements. This led to a 25% rise in net revenue leakage in 2025, with total losses exceeding $48 billion across 2,300 hospitals (vs. $38.6 billion in 2024). Denial rates increased from 2.5% to 2.7%, while bad debt rose from 1.1% to 1.3%. Patient responsibility also grew (6.8% to 7.3%), but collections declined (45.1% to 42.4%). Medicaid and Medicare Advantage showed higher denial rates, further worsening margins. Overall, reimbursement remains constrained, with rising denials, uncompensated care, and payer complexity driving sustained margin compression.
Workforce (shortage/violence) Workforce exposure in U.S. healthcare is increasingly driven by rising workplace violence and safety concerns, creating significant operational and liability risk. Over 60% of physicians (around 70% in hospitals) report physical security as a growing concern, while 40–43% feel only slightly protected or worse, indicating persistent safety gaps. Source: World Bank Group This elevates workers’ compensation and employer liability exposures, alongside higher claim severity from physical assaults. Increasing incidents also contribute to burnout, turnover, and staffing shortages, compounding operational risk. Despite investments in security measures such as cameras and access controls, effectiveness remains limited, highlighting the need for stronger prevention and risk mitigation strategies. Source: TheDo U.S. healthcare faces persistent workforce shortage exposure, driven by burnout, vacancies, and rising demand from an aging population. Financial pressures (high labor costs, inflation) limit hiring flexibility, while workforce fatigue reduces productivity and retention. Geographic disparities exacerbate shortages, especially in rural areas, creating sustained capacity constraints and operational risk for hospitals.
AI/Telehealth Telehealth and AI adoption are significantly expanding healthcare risk exposure. Telehealth use has steadily increased year over year, embedding virtual care across clinical workflows. Simultaneously, AI is being integrated into diagnostics, administrative processes, and care delivery, improving efficiency but introducing clinical, operational, and liability risks. Source: Forbes AI agents can automate decision-making and workflows, shifting responsibility structures and creating unclear accountability for errors or system failures. Recent U.S. examples highlight rising digital health liability from AI and telehealth ecosystems. The OpenLoop telehealth breach (2026) exposed around 1.6 million patient records and triggered lawsuits across multiple platforms. The Serviceaide (AI-enabled platform) breach exposed around 483,000 patient records, prompting legal investigations. Together, these cases demonstrate growing cyber, privacy, and third‑party risk linked to telehealth and AI adoption. Overall, increased reliance on digital and AI-enabled care models is driving higher complexity, greater dependency on technology, and elevated exposure to clinical and operational risks.
The Future of Telehealth
M&A U.S. healthcare M&A transitioned from a slowdown in 2025 to a stronger 2026 outlook. In 2025, deal volume rose around 9.6% year over year to around 747 transactions, while deal value fell around 1.6% due to regulatory pressures and a late-year slowdown. PwC projects recovery in 2026, driven by improved conditions, higher-quality assets, and renewed private equity activity. Key strategies include bolt-on acquisitions, carve-outs, and investments in AI, revenue cycle management, and telehealth. Hospital M&A rebounded in Q1 2026, reaching a six-year high of 22 deals and around $14.5 billion in revenue. Financial distress fueled around 43% of 2025 deals, particularly in rural hospitals, with cost pressures and regulatory scrutiny expected to sustain consolidation momentum into 2026.
Private Equity Private equity (PE) owns about 488 U.S. hospitals (PEstakeholder, April 2025), accounting for 8.5% of private hospitals and 22.6% of for-profit facilities, with 27.7% serving rural areas. Ownership is concentrated among major firms, with Texas leading in volume and New Mexico in share. Psychiatric hospitals comprise around 23% of PE holdings. Concerns persist over bankruptcies, closures, and limited regulatory transparency. In Q1 2026, North American healthcare PE activity declined (−16% in deals, −23.3% in value), though exits rose modestly. Despite the slowdown, large deals continued, especially in elder care. Following strong 2025 fundraising ($54 billion), 2026 shows fewer but larger deals, with growing focus on AI, health IT, and scalable, technology-driven healthcare platforms.
Technology Emerging technologies are rapidly transforming the U.S. healthcare sector in 2026, shifting care toward more personalized, digital, and patient-centric models. Remote patient monitoring, wearables, and at-home diagnostics are becoming mainstream, enabling early detection and proactive management of chronic conditions outside hospital settings. AI is expanding across diagnostics, risk assessment, and administrative workflows, improving efficiency and allowing clinicians to focus more on patient care. Additionally, advances in genetic testing and biomarkers are driving precision medicine, tailoring treatments to individual patient profiles. These technologies are complemented by a growing emphasis on healthy aging and lifestyle-based care as patients demand more accessible, continuous, and preventive healthcare solutions. Overall, the sector is evolving toward a data-driven, decentralized, and preventive care model, enabled by integrated digital technologies. Read more: AI vs. IA
Changing trend of opting Insurance ACA enrollment in 2026 is down approximately 4.9% (to about 23.1 million from 24.3 million in 2025) due to the expiration of enhanced premium subsidies, which is shifting the U.S. insurance landscape toward greater reliance on employer-sponsored coverage. As individual plans become less affordable, many individuals are either moving to employer plans or becoming uninsured, increasing pressure on private sector coverage. Consequently, fewer individuals are maintaining coverage, leading to lower premium effectuated enrollment and a rise in uninsured or underinsured populations. Subsidized coverage also declined (from 92% to 87% of enrollees), increasing out-of-pocket costs. This trend is raising employer cost burdens as more dependents rely on corporate health benefits amid ongoing healthcare inflation. In response, employers are redesigning benefits through higher deductibles, increased cost-sharing, and narrower provider networks while expanding telehealth and value-based care options to control costs. At the same time, health benefits are becoming a critical tool for talent attraction and retention, especially as coverage alternatives weaken. Overall, the shift reinforces employers as central healthcare payers, increasing financial exposure while driving more strategic, efficiency-focused benefit models.
Growing demand of outpatient and telehealth options Home-based care is expanding rapidly, driven by an aging population in the U.S. The U.S. aging population is rapidly expanding, with over 46 million adults aged 65 or older today, projected to nearly 90 million by 2050, including an increase of around 18 million from 2020 to 2030, significantly driving healthcare demand. Rising costs and technologies such as remote monitoring and telehealth are enabling more complex, personalized care outside hospitals.
Retail and tech disruption in healthcare Retail and tech giants such as Amazon, Walmart, and CVS are reshaping healthcare by integrating pharmacy, primary care, and digital services. They are prioritizing scalable, consumer-centric models such as GLP‑1 programs and virtual care, leveraging existing infrastructure to improve access, reduce costs, and compete directly with traditional healthcare providers.
Growth in rural hospitals U.S. rural healthcare faces persistent financial and structural challenges, including low patient volumes, workforce shortages, and fragile margins, making hospitals vulnerable to closures. Federal policy support is expanding, with programs such as the Rural Community Hospital Demonstration extension and the $50 billion Rural Health Transformation Program aimed at stabilizing access and funding. Source: [healthtechmagazine.net] [aha.org], [bipartisanpolicy.org] Technology adoption is a key focus, with increasing investment in telehealth, AI, and digital infrastructure to improve care delivery efficiency. However, infrastructure gaps, outdated systems, and funding uncertainty continue to limit scalability, while innovation and targeted pilots are emerging to address access and operational constraints.
Growth of alternative insurance With the expiration of enhanced ACA premium tax credits at the end of 2025, average subsidized marketplace premiums surged by 114% in 2026, prompting many Americans to seek cheaper alternatives. Farm bureau health plans, now available in 14 states, have gained traction due to premiums that are 30–50% lower than unsubsidized ACA plans. However, these plans use medical underwriting, can deny coverage for preexisting conditions, and often exclude related care for up to seven years. While enrollment interest is rising (Missouri saw 520 applications in the first two months), these plans lack ACA protections, creating affordability for some but leaving those with chronic conditions at risk. Policy experts warn this trend may increase the number of uninsured and destabilize regulated insurance pools. Source: KFF
Rise of nonprofit hospitals The U.S. healthcare system is highly consolidated and comprises over 900 systems, with nearly 80% operating as nonprofit entities, including governmental and voluntary organizations. These systems play a dominant role in care delivery, emphasizing community benefit, reinvestment of surplus revenues, and tax-exempt operations. The Department of Veterans Affairs leads in scale, followed by major nonprofit networks such as CommonSpirit Health and Kaiser Permanente, while HCA Healthcare remains the largest for-profit provider. Nonprofit hospitals significantly shape market dynamics and present strong partnership opportunities for healthcare stakeholders. In 2025, the sector demonstrated stable growth, with the top 10 nonprofit systems increasing operating revenues by 7.7% (around $28 billion), driven by strong patient demand, outpatient expansion, and operational efficiencies. Growth was further supported by higher patient volumes, strategic acquisitions, and cost management initiatives. However, performance remains uneven across the sector, with larger systems outperforming smaller peers, indicating increasing bifurcation. Additionally, persistent headwinds, including rising labor and supply costs, reimbursement pressures, and Medicaid funding uncertainties, continue to constrain margins and influence strategic priorities, prompting nonprofits to focus on efficiency, scale, and selective expansion.
Thin margins U.S. healthcare margins are under sustained pressure, reflecting a shift to a “new normal” of thin profitability. Industry EBITDA has declined from around 11.2% of health expenditures in 2019 to around 8.9% in 2024, with further contraction expected. Net income margins remain in the low single digits, highlighting fragile financial performance. Key drivers include rising labor, supply, and drug costs, which continue to outpace revenue growth, alongside persistent workforce shortages. Additionally, reimbursement constraints and a worsening payer mi, with higher Medicare, Medicaid, and uninsured populations, are limiting revenue upside. Policy and regulatory changes could further reduce margins by 2 to 13 percentage points, while enrollment declines increase uncompensated care. Overall, providers and payers face compressed margins, cost volatility, and revenue uncertainty, forcing a strategic shift toward cost optimization, scale, and technology adoption to restore profitability. Learn more: How Healthcare Organizations Can Lower Their Total Cost of Risk
Shortage of labor The U.S. healthcare workforce, particularly in nursing, faces significant shortages through 2038, according to HRSA’s Health Workforce Simulation Model. Nationally, a shortage of registered nurses (RNs) is projected, with an 8% deficit in 2028, improving to a 3% shortage (about 109,000 FTEs) by 2038. Nonmetro areas will be hit hardest, with shortages as high as 24% in 2028, compared to 5% in metro areas. Licensed practical/vocational nurses (LPNs) will see even greater deficits, with supply meeting only 70% of demand by 2038, a shortfall of nearly 246,000 FTEs. While nurse practitioners (NPs) are projected to exceed demand, their distribution remains uneven. Geographic disparities are stark: California, North Carolina, and Georgia are among the states facing the largest RN shortages, while some states may experience oversupply. These trends highlight ongoing challenges in workforce distribution and adequacy across the U.S. healthcare system. Learn more: Bill of Health
Rising trend of denied claims Rising claims denials have become a major financial challenge for U.S. healthcare providers, significantly eroding revenue cycles. In 2025, hospitals experienced a 25% increase in net revenue leakage, with losses exceeding $48 billion, up from $38.6 billion in 2024, driven largely by higher denial rates and uncompensated care. The challenge is primarily fueled by increased payer denials on clinical grounds, including lack of prior authorizations and medical necessity issues. Denial rates have risen, with final denial rates increasing from 2.5% to 2.7%, alongside growing bad debt levels, intensifying financial strain. Additionally, payer behavior is worsening outcomes, with lower success in overturning initial denials and significant variability across payer types. Medicaid shows the highest denial rates, while commercial plans drive greater revenue losses due to higher reimbursement values. Compounding the issue, patient payment responsibility is rising, while collections are declining, further amplifying revenue leakage. Overall, increasing denial complexity and reduced reimbursement recovery are placing sustained financial pressure on providers.
Shortage of labor The U.S. healthcare workforce, particularly in nursing, faces significant shortages through 2038, according to HRSA’s Health Workforce Simulation Model. Nationally, a shortage of registered nurses (RNs) is projected, with an 8% deficit in 2028, improving to a 3% shortage (about 109,000 FTEs) by 2038. Nonmetro areas will be hit hardest, with shortages as high as 24% in 2028, compared to 5% in metro areas. Licensed practical/vocational nurses (LPNs) will see even greater deficits, with supply meeting only 70% of demand by 2038, a shortfall of nearly 246,000 FTEs. While nurse practitioners (NPs) are projected to exceed demand, their distribution remains uneven. Geographic disparities are stark: California, North Carolina, and Georgia are among the states facing the largest RN shortages, while some states may experience oversupply. These trends highlight ongoing challenges in workforce distribution and adequacy across the U.S. healthcare system.
Evolving regulations Complex and evolving regulations are creating significant bottlenecks across the U.S. healthcare system by disrupting coverage, compressing margins, and increasing operational uncertainty. The One Big Beautiful Bill Act (OBBBA) is expected to reduce coverage for around 10 million individuals and cut $1.1 trillion in federal healthcare spending, which will likely increase uninsured populations and uncompensated care burdens placed on providers. This alone could cost hospitals $25 billion annually, worsening financial strain. Simultaneously, regulatory changes such as site-neutral payment policies and potential revisions to the 340B Drug Pricing Program are directly eroding provider revenue streams, with margin impacts ranging from –2% to –4% or more. Additional pressures from eligibility changes, subsidy expirations, and tax policies further compound margin compression. These overlapping policy shifts create operational complexity, forcing health systems to continuously adapt care models, optimize costs, and reallocate resources. Ultimately, regulatory volatility is slowing decision-making, limiting financial flexibility, and constraining providers’ ability to invest in care delivery innovation. U.S. healthcare faces mounting structural and financial challenges, particularly across nonprofit and Medicare-linked systems. Rising labor and supply costs, reimbursement pressures, and Medicaid uncertainties continue to compress margins, disproportionately affecting smaller providers and widening sector bifurcation. Regulatory changes and payment reforms are increasing administrative burden, while the shift toward outpatient and value-based care requires significant capital investment. Additionally, Medicare enrollment dynamics add complexity. Beneficiaries delaying Part D enrollment face permanent premium penalties, increasing affordability pressures, and discouraging optimal coverage uptake. At the system level, recent CMS rules emphasize cost control and fraud reduction through stricter eligibility verification, subsidy oversight, and expanded state control, further tightening compliance requirements. Collectively, these pressures are driving financial distress, especially in rural hospitals, accelerating consolidation while raising long-term concerns around access, affordability, and system sustainability.
Rising costs in healthcare firms Rising operating costs are significantly straining the U.S. healthcare system, driven by external economic pressures and structural demand shifts. Tariffs on medical supplies and pharmaceuticals are increasing input costs, with spending projected to rise by 0.2% to 8.4%, amplifying financial pressure on health systems and creating uncertainty in procurement and budgeting. At the same time, an increasingly older population (particularly those aged 70 or more) is driving higher healthcare utilization, intensifying demand for services, workforce capacity, and infrastructure. This demographic shift, combined with persistent workforce shortages, is straining access, quality, and operational efficiency. Additionally, rising employer-sponsored health coverage costs are creating a mixed effect, potentially increasing reimbursement rates but also reducing discretionary care utilization and resulting in up to 0.5 percentage points of margin pressure. To manage these cost pressures, health systems are investing in ambulatory care expansion, workforce pipeline development, and home-based care models. However, these responses require upfront investments, further compounding near-term cost pressures and operational complexity.
Political instability U.S. healthcare and research face growing political challenges driven by funding cuts, policy instability, and governance conflicts. The Trump administration’s dismantling of USAID and redirection of around $2 billion from global health programs reduced support for critical services such as HIV, malaria, and maternal care, risking higher mortality and weakened global health systems. Domestically, cuts and freezes to scientific research funding, totaling billions, have disrupted clinical trials, slowed innovation, and created long-term uncertainty. Alison Cartwright. (2026, February 12). Hospital Lawsuit Statistics. WifiTalents. https://wifitalents.com/hospital-lawsuit-statistics/
Healthcare| Gallagher Bassett
