Weathering the Storm: What Rising Costs and Declining Margins Mean for Revenue Cycle Leaders

How finance leaders can navigate the perfect storm of inflation, reimbursement pressures, and operational complexity.

For health system CFOs, the numbers speak for themselves—and they’re not kind. More than half of rural hospitals are operating at a loss. Labor expenses have climbed over 15% since 2020. Hospital bankruptcies hit a five-year high in 2023. Meanwhile, reimbursement rates continue to lag behind inflation, leaving even the most efficient organizations struggling to maintain equilibrium.

The storm isn’t passing—it’s intensifying. Economic pressures, payer complexity, and workforce disruption have made financial stability one of the most elusive goals in healthcare. As margins continue to erode, CFOs must evolve from crisis managers to navigators of transformation by charting a new course toward sustainable performance, not just survival.

The Economics of Unsustainability

The economic realities of healthcare today have fundamentally shifted. In an environment where input costs —from staffing and supplies to interest rates—continue to rise faster than revenue, the traditional playbook no longer works. Incremental cost-cutting and one-time efficiency projects are insufficient against systemic headwinds like:

• Persistent inflation and wage growth: Compensation demands, traveler nurse premiums, and contract labor costs remain stubbornly high, even as patient volumes fluctuate.

• Payer pressure and reimbursement delays: Increasing claim denials, slow payment cycles, and complex prior authorization processes have put immense strain on cash flow.

• Operational fragmentation: Legacy systems, siloed teams, and manual workflows have compounded inefficiency, creating hidden revenue leakage and inconsistent performance across departments.

The old model of incremental optimization can no longer offset these forces. RCM continues to be one of the largest controllable levers of financial health. Yet for many organizations, it’s also one of the least optimized. According to the National Library for Medicine, research shows that manual workflows, disjointed data, and staffing inefficiencies quietly erode up to 5% of net patient revenue annually. Financial sustainability requires a fundamentally different approach to cost, capacity, and performance in revenue cycle management, where the opportunity for improvement remains significant.

When every percentage point in collections matters, that kind of leakage is no longer tolerable. It’s not just a process problem but also a strategic imperative..

Margins Are Mission-Critical

Today’s healthcare CFOs face a unique dual mandate of preserving financial integrity while protecting access to care. Every decision involves workforce structure, technology investment, or vendor partnerships to balance operational efficiency with patient outcomes. Cost-cutting in isolation, however, rarely leads to long-term success. Reducing labor spend or outsourcing tasks without addressing underlying inefficiencies only shifts problems downstream. True margin improvement doesn’t come from doing less, but rather it comes from more efficiency and effectiveness. The result is transforms RCM from a cost center into a strategic engine, focused on maximizing yield, accelerating cash flow, and strengthening your health system’s financial foundation.

To achieve this, CFOs must focus on three critical performance levers:

1. Efficiency: Streamline workflows and eliminate manual handoffs that delay claim resolution.

2. Effectiveness: Improve first-pass yield by leveraging analytics to target high-impact accounts and root causes of denials.

3. Empowerment: Equip teams with the insights, tools, and training they need to operate at peak performance.

Partnering with a revenue cycle organization that aligns people, process, and technology is no longer optional—it’s mission critical. CFOs should look for partners who deliver measurable outcomes and  can co-govern transformation rather than merely provide transactional support and incremental fixes.

The Human Factor: Workforce as a Strategic Asset

Another defining challenge for today’s finance leaders is the workforce. High turnover and burnout have strained the operational backbone of many RCM departments. The concern if further validated by burnout data per Indeed’s Pulse of Healthcare 2024 Report, that approximately “64% of healthcare workers said they were overworked and responsible for too many things during their shifts.”

Skilled professionals are hard to find and harder to retain, making the realities workforce engagement a financial issue as much as an HR concern. The most successful CFOs are reimagining their teams not as fixed cost centers, but as strategic assets capable of driving measurable performance gains when properly supported.

By investing in workforce optimization of training, workload balancing, and the intelligent application of workflow automation, organizations can both reduce burnout and improve throughput. The result is a more resilient operation that performs consistently even amid market turbulence.

Turning Headwinds into Opportunity

While the headwinds are undeniable, they also present opportunity. The financial constraints of recent years have accelerated innovation across healthcare finance, driving adoption of technologies and strategies that were once seen as optional.

Forward-looking CFOs are demanding:

• Data transparency to uncover the true drivers of cost and performance across their revenue cycle.

• Automation to reduce administrative burden and improve consistency in complex processes like denials and underpayments.

• Advanced analytics to model scenarios, forecast cash flow, and prioritize interventions that have the greatest financial impact.

At the forefront of this shift are organizations leveraging Currance’s patented performance approach—a proven framework and methodology that empowers health systems to prioritize high-impact accounts, automate non-value-added work, and identify the root causes of revenue leakage.

By combining data intelligence with operational expertise, Currance helps CFOs achieve both immediate financial lift and long-term performance resilience. It’s not about replacing human expertise with technology; it’s about amplifying it.

From Crisis Response to Strategic Readiness

The pandemic forced many health systems into reactive mode, prioritizing survival over strategy. As the landscape continues to evolve, finance leaders have an opportunity and responsibility to shift from reactive response to strategic readiness.

That requires building an infrastructure of agility:

• Processes that can flex with market shifts.

• Teams that are equipped to manage complexity with confidence.

• Partners that can adapt and scale alongside the organization.

Transformation at this scale doesn’t happen overnight. But with the right approach—grounded in performance analytics, workforce engagement, and continuous improvement—health systems can move from simply weathering the storm to using it as a catalyst for reinvention.

The CFO’s New Role: Catalyst for Change

The role as healthcare CFO has evolved beyond finance. Today’s leaders must act as strategic navigators, bridging operational, clinical, and technological domains. They are expected to anticipate risk, enable innovation, and translate financial data into enterprise-wide action.

To thrive in this environment, CFOs must lead with both financial acumen and operational foresight. They must align their organizations around a shared goal: achieving sustainable performance through smarter, data-driven decision-making.

It’s not enough to manage revenue cycle metrics in isolation. True transformation requires connecting the dots across the enterprise by linking RCM efficiency, workforce productivity, and overall mission viability.

Key Takeaway

Rising costs and shrinking margins are not just financial problems, but are rather revealing strategic inflection points. They represent a moment of truth for healthcare finance leaders reacting to volatility or harness it as a force for transformation. CFOs who invest in performance-driven RCM transformation today—supported by advanced analytics, intelligent automation, and empowered workforces—will be the ones weathering tomorrow’s storms with confidence for sustainable performance.

At the end of the day, sustainability isn’t about doing more with less. It’s about doing better with what you have, and building the systems, teams, and partnerships that make that possible. 

Discover how we can chart a new course of sustainable RCM performance in 2026 together: Get Your Free Guide to Sustainable RCM Success. 

If you would like to discuss your current RCM performance, we’re ready to partner on your success!  Contact Currance when you feel ready.