Redesign Before Reduction, Finding a Smarter Path Forward for U.S. Healthcare
Written from the Desks of Josh Sol, MBA , Rachel Hall , Kendall Pelander
Healthcare is in an uncomfortable era of rising costs, continuing labor shortages, supply chain volatility, fragile margins and mounting challenges with patient care access, health systems have seldom seen a more challenging time. Couple those ongoing complications with new legislation and regulations, and the current climate has become exceptionally challenging to navigate. Healthcare leaders face a familiar, but increasingly urgent question:
How do we stabilize care delivery without compromising caring for the people who depend on us most?
A recent Wall Street Journal article warns of looming federal cuts to Medicaid under the current administration, reviving long-standing fears across children’s hospitals, rural providers, and community health networks [1]. The possibility of reduced funding comes just as many organizations are still reeling from pandemic-era losses and facing structural shortfalls. Each health systems’ ability to identify the impacts and take appropriate actions will be critical to their longevity and to the overall health of the communities they serve.
Today’s communities and infrastructure depend heavily on their safety net systems, the network of public services and institutions designed to protect vulnerable populations and ensure access to essential care, support, and resources. But that safety net is stretched thin. Trust in these systems, including the policies and legislation that govern them, is increasingly fragile. Yet amid the uncertainty, there is also an opportunity rooted in intelligent system design, powered by AI, leveraging existing technologies, achieving economies of scale, and embracing the next wave of innovation.
With the passage of the Health Care Innovation and Rural Access Act of 2025, we are presented with a unique chance to move beyond reactionary cost-cutting and toward structural, intelligent redesign of how care is delivered, accessed, and sustained. The window is narrow, but the tools are ready when designed strategically with the full organization and communities in mind.
The Urgency of Understanding Medicaid Cuts, Workforce Strain, and Access Needs
Experienced healthcare leaders are anticipating many challenging aspects of the recent legislation. Due to the significant focus on reductions in funding, leaders are anticipating potential impacts such as:
The potential rollback of Medicaid expansion could deeply impact care for children, disabled populations, and low-income families. In this climate, we cannot afford to wait and react. We need to plan, seeking ways to rethink services and infrastructure rather than simply improve them.
We must redesign proactively, not to cut care, but to preserve it, through smarter, more agile and more sustainable models.
Structural Cost Take-Out: Rethink and Redesign
In the age of so many highly impactful new regulations and policies, healthcare organizations need to consider all types of efficiencies, completely rethinking how they deliver care. Redesign in this environment may require:
AI presents a transformative opportunity to rethink how health systems operate. It has the potential to serve as a system-wide enabler—streamlining operations, generating insights, and ultimately improving patient and provider experiences. For the first time, the key forces of legislation, technology, and economics are aligned in support of AI adoption.
To fully realize this potential, health leaders should ask how an intelligent, aggregating platform can drive automation and insight generation—reshaping traditional workflows from the ground up. Equally important is moving beyond standalone point solutions to explore tools that integrate across the broader ecosystem.
We’ve seen this before: the evolution of the EMR landscape. As point solutions became fragmented and difficult to manage, health systems shifted toward integrated platforms like Epic and Cerner. A similar trajectory is likely for AI. Without strategic alignment, a proliferation of point AI tools could become expensive and operationally inefficient. The future lies in integrated, scalable solutions that work across the care continuum.
AI Can be the New Foundational layer of Healthcare Operations
When deployed intentionally, AI can transform everything from documentation and triage to workforce management and procurement. Not as a shiny object—but as a practical tool to stabilize margin, improve access, and reduce burnout. Think enterprise approach.
Key AI-Enabled Areas of Impact
This is not “innovation theater.” These tools are already producing real results. But scaling them systemwide, equitably, safely, and sustainably, requires alignment, governance, and infrastructure.
What the Future Holds: Strategic Bets
1. AI Will Become Healthcare’s Operating Layer
Most workflows will soon be AI-augmented at the point of execution, not just in the back office.
2. Margin Will Be Protected Through Avoided Cost
Smart systems will redesign their way to sustainability—both through new revenue, and through eliminating what no longer serves value.
3. AMCs Will Become AI Infrastructure Hubs
Academic centers will share vetted models and tools with regional and rural partners, enabling scaled access and safety through out the regions they serve
4. Access Will Be Intelligent, Not Just Geographic
AI will power pediatric and maternal triage, behavioral care routing, and chronic condition detection, reaching families no matter their ZIP code.
5. Data Will Become Better Connected, Enabling Insights and Proactive Care
Platforms will drive interconnectedness of data, thus establishing the foundation for wholistic proactive care and insights to improve outcomes.
Areas of Opportunity to Make the Bets a Reality
This isn’t about selling AI. It’s about activating new system thinking, with AI as the engine.
1. Designing AI-Enabled Operating Models
Rewire clinical and administrative processes to eliminate friction and scale outcomes. This must be done at the highest levels of the organization and tied into strong governance, data quality oversight, and processes for strategy and initiative approvals.
2. Accelerating Structural Cost Take-Out
Go beyond cuts to remove unnecessary steps, reduce handoffs, and replace outdated workflows. Start with manual process automation and advance to AI for insights.
3. Scaling Pediatric and Rural Access
Use AI-powered tools to bring care to the child—especially where brick-and-mortar can’t reach. Hospital at home, remote patient monitoring, or specialty care support through telemedicine strategies will lead the way with a physical-to-virtual care integration, leveraging AI for insights. Apply digital command centers to monitor the continuum of care centrally and reach regional needs
4. Operationalizing Governance and Safety
Implement ethical guardrails, clinical validation processes, and responsible procurement standards.
5. Turning Legislation into Action
Secure and deploy federal funding tied to AI infrastructure, rural innovation, and pediatric access. Work within the framework to maximize the opportunities for expansion of innovation.
Let’s Build a Smarter Ecosystem
The fears around Medicaid and funding cuts are real. But fear alone is not a strategy. The best defense we have is a proactive one: designing a system that can withstand volatility because it’s leaner, smarter, and more resilient.
Platforms and AI alone won’t save healthcare and are not silver bullets. But they can help us save what matters most, access for children and the broader population, dignity for patients, bandwidth for clinicians, and stability for the communities who depend on us.
This moment isn’t about automation. It’s about intelligent preservation of the mission to serve people in need.
Let’s build the future before it’s built for us!
References
Medicaid pressure is real, but the opportunity to redesign instead of just reduce is where hope lives.
Just read. Thank you for sharing and great article.