Healthcare US 2026 Healthcare Outlook: Risk, Resilience & Vitality

A commitment to strong risk management will help direct healthcare providers toward long-term stability.

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What to Expect in 2026

Medicaid cuts, declining reimbursement rates, medical inflation and labor shortages will complicate healthcare providers’ economic viability in 2026. Federal funding issues and rising labor costs will affect employee vitality. An integrated, enterprise-wide approach that enhances risk maturity, investment foresight and a strong broker relationship will be key to resiliency.

Economic viability

Vitality

Resiliency

Cybersecurity

Economic viability

Healthcare providers will continue to face a complex financial environment in 2026. That will lead all providers — whether they are hospitals, clinics, physician practices or senior care operations — to evaluate their care delivery models to improve economic viability. The financial shortfall from Medicare and Medicaid underpayments is growing 14% annually,1 even before reductions to Medicaid in the 2025 federal budget reconciliation bill.2 Rural hospitals, already in crisis, will see 37% of those cuts restored through the bill’s $50 billion rural health fund.3 In addition, financial risk increases as commercial insurers delay one in three inpatient claims for more than three months, even as some Medicare Advantage plan reimbursements have fallen 8.8% since 2019.4 Healthcare organizations are also grappling with executive actions on immigration, medical research funding and tariffs, all against a backdrop of medical inflation and wage growth. These policy shifts will encourage diversification, local sourcing strategies and workforce planning that can create stronger operations. According to the HUB International 2026 Profitability & Resiliency Executive Survey,5 93% of respondents classified as “community and public services” (which includes healthcare organizations) identified rising operational and labor costs as the most likely element to hurt the bottom line in 2026. U.S. tariffs may increase healthcare costs for pharmaceuticals and medical supplies.6 Cuts to research and clinical trials

Stronger budgeting and enterprise risk management will help providers maintain economic viability.

could further destabilize healthcare finances on several levels, making it important for organizations to prioritize strategic partnerships and embrace innovative clinical trial models.

There’s no single solution to financial instability, but providers can pursue strategies to help stabilize their economic viability. To help with finances, providers are considering budget and departmental restructuring, as well as paring capital expenditures. They may also explore mergers with other healthcare entities. Despite only 13 mergers in the first half of 2025, compared to 31 in the first half of 2024, industry observers predict more activity in 2026.7 Healthcare enterprises that implement or strengthen their enterprise risk management (ERM) program — and the right insurance solutions — will help minimize costs while moving up the maturity risk curve. Partnering with a broker with deep industry expertise will help improve stability today and financial viability for tomorrow.

Due to federal policy shifts, providers will evaluate funding sources and procurement procedures to protect profits.

In the next decade, healthcare will add more jobs than any other industry, with 1.6 million new positions expected by 2033.8 Despite the difficulty in finding workers, providers will have opportunities to develop and retain talent through training and personalized benefits. In 2024, labor costs accounted for $890 billion in hospital expenses, or 56% of the total. The shortage is driving up salaries: For example, salaries for registered nurses have grown 26.6% faster than inflation.9 Providers have traditionally turned to outsourced personnel, but that can only go so far to make up for these shortages. While technology and automation cannot fully replace humans, many providers are taking the opportunity to roll out new tech initiatives, including artificial intelligence (AI), to increase employee productivity. High turnover in a high-stress environment also contributes to healthcare’s labor challenges. But it’s not all bad news: Turnover in healthcare has fallen to 18% from 20% in 2024. There’s been difficulty in maintaining engagement across a spectrum of healthcare workers, with nursing positions and advanced providers garnering some of the lowest scores. Disengaged healthcare workers are 1.7 times more likely to leave their jobs than fully engaged employees.10 In addition, workplace violence injuries in healthcare occur at a significantly higher rate than in other industries,11 while mental health among healthcare workers has been problematic for several years.12 These represent objective areas in which providers can improve.

These trends also indicate a fraying connection between employees and their leadership. For instance, 48% of healthcare employees have a neutral or negative perception of their organization’s commitment to safety,13 an essential element in building trust and improving retention.

Personalized employee benefits that are responsive to individual needs are an instrumental part of the solution. HUB’s 2025 U.S. Workforce Vitality Gap Index found that nearly three-fourths of employers want to improve benefits, and of those, 72% are expanding benefits. For healthcare providers, that means an increased commitment to safety, providing material resources to help mental health and benefits that meet the needs of an increasingly diverse workforce. Healthcare employers can leverage data by using tools like HUB’s Workforce Persona Analysis™ to deliver personalized benefits that will help restore trust, loyalty and engagement. Third-party tools and platforms, such as HUB FinPath, can help improve employee financial wellbeing and improve engagement.

Amid ongoing labor shortages, rebuilding trust, engagement and culture through benefits will be essential.

Vitality

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Download our 2026 Healthcare Outlook and Insurance Market Rate Report to see what to expect in the coming year.

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Funding pressures will test healthcare providers’ resiliency in 2026, but they’ll also face risk management issues, including medical safety, climate change and rising insurance rates. Still, they’ll have opportunities to make good on bettering their risk profiles and improving risk maturity. True resiliency means anticipating and adapting to pressures before they escalate, aligning with broad risk maturity models that healthcare leaders are using to help ensure their institutions thrive for the long haul. The many risks facing healthcare are increasingly reflected in insurance premiums. Preventable medical errors remain a leading cause of death in the U.S., while nuclear verdicts — those exceeding $10 million — continue to grow in frequency and severity. In 2024, the 50 largest verdicts averaged $56 million, roughly double the average from five years earlier.14 These trends are directly shaping the insurance landscape, with medical professional liability premiums expected to rise by as much as 15% in 2026. Underwriters are responding with heightened selectivity, particularly toward insureds with extensive claims histories or elevated risk profiles, as they seek to preserve portfolio stability amid mounting loss severity. For similar reasons, general liability and umbrella/excess liability premiums are also expected to increase — in some cases by as much as 20% — though rate pressure will vary by sector and geography. With lawsuits and defense costs continuing to escalate, insureds with exposures to potential violence may face particular challenges securing adequate coverage. As systemic risks to the healthcare sector continue to grow, the solutions themselves can introduce new vulnerabilities. Funding constraints are forcing some rural hospitals15 to reduce services or close departments entirely — measures that, while often unavoidable, can heighten exposure to patient care and emergency response risks. Cuts to Medicare and other federal programs are also straining operating budgets, making it more difficult for providers to secure affordable business interruption coverage. However, these challenges are prompting organizations to explore alternative risk financing strategies. Underwriters are increasingly rewarding institutions that demonstrate strong

enterprise risk management (ERM) frameworks and robust governance with more favorable terms and lower rates. Building resilience also extends to workforce readiness and safety culture. As hospitals consolidate or close specialty units, clinicians are being called upon to provide broader, whole-patient care beyond their traditional disciplines, reinforcing the importance of training, cross-functional collaboration and proactive risk mitigation.

A well-structured ERM program — a cornerstone of advancing along the risk maturity curve — provides a roadmap for healthcare organizations to navigate the formidable challenges threatening their long-term survival. Beyond compliance, effective ERM integrates operational, financial and clinical insights, helping leaders anticipate emerging threats and align strategic decision-making with resilience goals. Downside risk contracts can also play a pivotal role. By sharing accountability for outcomes when cost or quality benchmarks are not met, these agreements incentivize providers to focus on value rather than volume. Success in this model requires rigorous financial discipline, robust care management and data analytics capable of identifying both risk drivers and opportunities for improvement. Healthcare organizations that collaborate with brokers possessing deep industry expertise are better positioned to turn these challenges into strategic advantages. With tailored risk strategies and informed guidance, they can not only withstand volatility but build the financial and operational resilience needed to thrive in 2026 and beyond.

Providers will optimize risk management and insurance solutions to stay resilient and improve their risk maturity.

Resiliency

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As cyber threats escalate, healthcare providers are reinforcing their defenses and resilience. The cost of a data breach in healthcare — averaging $7.4 million per incident — remains the highest of any industry. Compounding the issue, healthcare breaches take an average of 279 days to identify and contain, more than five weeks longer than the global average,16 underscoring the urgency for stronger cybersecurity governance. Healthcare accounted for nearly a quarter of all reported data breaches in 2025. The motivation is clear: Stolen medical records can fetch as much as $1,000 per file, compared to just $5 for a credit card number,17 making healthcare an attractive target for cybercriminals. Recent cyber breaches at a major hospital system and a third-party service provider18,19 underscore the urgency with which providers are now moving to enhance security. The recent breaches followed two major cyberattacks the previous year: one that threatened a hospital system’s ability to operate20 and another on a service provider that cost $1 billion.21 Despite the escalating threat landscape, the good news is that healthcare entities have strong, sophisticated tools to reduce risk. Leading providers are embedding cybersecurity into their ERM frameworks and safety cultures, ensuring digital resilience is viewed as a strategic imperative rather than an IT function. Replacing legacy systems, implementing endpoint detection and multi-factor authentication, and using predictive analytics to identify vulnerabilities before they are exploited are helping organizations advance along the risk maturity curve. Emerging tools are also reshaping the sector’s defensive posture. Generative AI technologies now automate security

alerts, refine incident response protocols and help develop adaptive policies that keep providers ahead of evolving threats. Meanwhile, enhanced vendor risk management programs are strengthening cyber resilience across healthcare supply chains. Cyber insurance remains a critical backstop in this evolving risk environment. Although premiums for healthcare entities remain among the highest — and could rise another 10% in 2026 — underwriters are rewarding organizations that demonstrate robust security controls and cyber hygiene. Insurers increasingly require evidence of operational resilience and control maturity before issuing or renewing coverage.

This alignment between strong cybersecurity practices and insurability is paying off. In HUB International’s 2026 Profitability and Resiliency Survey, 46% of healthcare respondents reported plans to increase cyber coverage — the highest percentage among all industry groups. One HUB client that spent a year strengthening its cybersecurity infrastructure not only enhanced coverage but also reduced its deductible from $2.5 million to $500,000, showing that investment in cyber resilience delivers measurable financial returns.

As breaches and ransomware attacks mount, providers will leverage every tool at their disposal to fight cybercrime.

Cybersecurity

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HUB healthcare industry insurance, risk management and employee benefits specialists will work with you to develop a tailored strategy to protect your bottom line, support the vitality of your workforce and build resiliency for 2026. Here are some initial considerations:

Moving Your Organization Forward

Risks in healthcare have increased — and so have insurance premiums. Consider taking a higher deductible on some coverages, which reduces premiums and improves experience rating, or think about alternative risk transfer vehicles to lower costs. Ask your broker what kind of insurance strategy meets your risk profile and budget.

Accelerate your risk maturity.

Employees expect you to support their health, safety and wellbeing. A benefits strategy based on personalization and fostering quality employee experiences (QEX) will boost engagement, recruiting and retention and lower risk.

Increase engagement through benefits.

Understand the root cause of your large losses and explain to carriers what you’re doing to prevent future losses. Develop a strategy with HUB to determine the best time and frequency to review alternative markets.

Understand your loss trends.

Let your broker know what changes you’ve made to the business, so there are no surprises at renewal. Review exposures and insurance needs at least 90 days prior to policy renewal, so your broker can identify the best options.

Be transparent with your broker.

Download our 2026 Healthcare Outlook and Insurance Market Rate Report to see what to expect in the coming year.

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When you partner with us, you’re at the center of a vast network of experts who will help you reach your goals. For more information on how to manage your insurance costs, reduce your risk and take care of your employees, talk to a HUB Healthcare insurance specialist.

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Stronger budgeting and enterprise risk management will help providers maintain economic viability.

Amid ongoing labor shortages, rebuilding trust, engagement and culture through benefits will be essential.

Providers will optimize risk management and insurance solutions to stay resilient and improve their risk maturity.

As breaches and ransomware attacks mount, providers will leverage every tool at their disposal to fight cybercrime.

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3. KFF, “A Closer Look at the $50 Billion Rural Health Fund in the New Reconciliation Law,” August 4, 2025.

4. ClaimBridge, “Commercial payers delay paying out claims to providers,” June 3, 2023.

1. American Hospital Association, “The Cost of Caring: Challenges Facing America’s Hospitals in 2025,” April 2025.

2. Politico, “The megabill’s Medicaid cuts shocked hospitals, but they may never happen,” July 14, 2024.

5. The HUB International 2026 Profitability & Resiliency Executive Survey polled 350 industry leaders and executives across North America on the issues facing them on profitability and resilience.

6. American Hospital Association, “Tariff Implications for American Healthcare,” May 19, 2025.

7. This Week Health, “Hospital Mergers Dipped in First Half of 2025, Expected to Rebound Amid Political Shifts,” August 12, 2025.

8. Altarum, “Health Care Employment Growth is Projected to Moderate but Remain Higher Than Other Industries,” November 8, 2024.

9. American Hospital Association, “The Cost of Caring: Challenges Facing America’s Hospitals in 2025,” April 2025.

10. PressGaney, “Healthcare Employee Experience 2025,” April 23, 2025.

11. CDC, “Prioritizing our Healthcare Workers: The Importance of Addressing the Intersection of Workplace Violence and Mental Health and Wellbeing,” May 29, 2024.

12. CDC Vital Signs, “Health Workers Face a Mental Health Crisis,” October 24, 2023.

13. PressGaney, “Healthcare Employee Experience 2025,” April 23, 2025.

14. Insurance Insider US, “Nuclear MedMal Verdicts: Is $50mn the new $25mn?” February 24, 2025.

15. Kiplinger, “What to Know About New Medicaid Cuts: Is Your Local Hospital Closing Soon?” July 11, 2025.

16. IBM, “Cost of a Data Breach 2025,” July 30, 2025.

17. HIPAA Journal, “Healthcare Was the Most Breached Industry in 2024,” February 25, 2025.

18. Healthcare Dive, “Data breach at Yale New Haven Health impacts 5.6M people,” April 24, 2025.

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In part, personalized benefits will help build employee trust and improve retention.

Providers with strong ERM will earn more favorable terms and lower rates.

At $7.4 million per incident, the average cost of a data breach in healthcare is higher than in any other industry.

Local competition meant a 25-bed, 220-employee critical access hospital had trouble attracting and retaining top talent. Working with HUB, the hospital formed an employee value proposition (EVP) that gave existing and potential employees compelling reasons to work at the hospital — while delivering a benefits package that lowered costs and put the hospital on a competitive footing with larger institutions.

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Download our 2026 Nonprofit Outlook and Insurance Market Rate Report to see what to expect in the coming year.

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Download our 2026 Healthcare Outlook and Insurance Market Rate Report to see what to expect in the coming year.

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Download our 2026 Healthcare Outlook and Insurance Market Rate Report to see what to expect in the coming year.

19. The HIPAA Journal, “Episource Cyberattack Attack Affects More Than 5.4 Million Individuals,” June 16, 2025.

20. NPR, “Cyberattack led to harrowing lapses at Ascension hospitals, clinicians say,” June 19, 2024.

21. IBM, “Change Healthcare attack expected to exceed $1 billion in costs,” accessed September 3, 2025.

3. KFF, “A Closer Look at the $50 Billion Rural Health Fund in the New Reconciliation Law,” August 4, 2025.

4. ClaimBridge, “Commercial payers delay paying out claims to providers,” June 3, 2023.

1. American Hospital Association, “The Cost of Caring: Challenges Facing America’s Hospitals in 2025,” April 2025.

2. Politico, “The megabill’s Medicaid cuts shocked hospitals, but they may never happen,” July 14, 2024.

5. HUB’s Profitability and Resilience Survey polled 350 industry leaders and executives across North America on the issues facing them on profitability and resilience.