These issues are not isolated operational concerns. They have become organization-level strategic risks that affect financial sustainability, patient outcomes, regulatory compliance, workforce stability, and organizational growth. Below are key issues healthcare entities are focused on in the Boardroom:

AI Governance and Compliance

AI is certainly everywhere. Patients may encounter AI in their first interactions with a healthcare provider from scheduling an appointment to asking specific questions about a medical procedure and receiving follow up information. AI is also being utilized in many clinical settings to improve quality of care and outcomes. Boards should be focused on:

• Clinical AI oversight must include human intervention and review of outcomes.
• AI governance committees should be in place and exploring best practices.
• AI risk assessments need to occur to understand where to focus the organization’s resources.
• Patient transparency is critical, and organizations must clearly communicate how AI is being used in patient care.
• Vendor AI due diligence is required to ensure the organization understands whether a vendor uses AI, what AI models are being used, how patient data is shared/accessed, and whether humans can override AI recommendations.
• AI-related cybersecurity risks may include how AI access is controlled, can prompts be audited, are inputs and outputs logged and if data encrypted.

Cybersecurity and HIPAA Compliance Risk

For healthcare organizations, cybersecurity and HIPAA compliance risk have evolved from an IT issue to a board-level enterprise risk.

• Ransomware attacks can disrupt hospital operations, delay patient care, and prevent access to EHR systems and other critical technologies. Boards need to understand how critical systems can be restored quickly, are backups protected from ransomware, and has recovery testing been performed.
• HIPAA compliance and Protected Health Information are key components of HIPAA Security Rule Compliance. The HHS Cybersecurity Performance Goals emphasize foundational cybersecurity safeguards, including multi-factor authentication, vulnerability management, and incident response planning.
• Data breach responses require certain notifications to occur within specified periods of time. Does the Board understand what constitutes a reportable event, who makes that determination, and how quickly regulatory notifications can be completed?
• Third-party vendor risk extends across the organization, including revenue cycle vendors, billing companies, managed service providers, EHR platforms, and AI-enabled healthcare solutions. Many breaches now originate through vendors rather than the healthcare organization itself.
• Cyber insurance considerations include ensuring adequate coverage limits which may need to cover forensic investigations, breach counsel, data restoration, business interruption, incident response consultants, patient notifications, credit monitoring and many other costs. It is equally important to understand policy exclusions, as coverage may be denied if required controls and procedures are not properly implemented and documented.

Financial Sustainability and Margin Improvement

Financial sustainability is the top strategic concern for healthcare organizations in 2026, according to McKinsey & Company in their January 12, 2026, article.

A few specific items related to financial sustainability include:

• Medicare and Medicaid reimbursement rates continue to create challenges as the Medicare population ages and pharmacy costs surge. Medicaid margins also face pressure due to adverse selection, delays in pricing revalidation, and member disenrollment, contributing to a growing uninsured and underinsured population. Adding to these challenges is ongoing uncertainty surrounding Medicare reimbursement reform, potential Medicaid funding changes, and the continued shift toward value-based reimbursement models.
• Revenue cycle optimization will require new care delivery approaches, pricing strategies, price transparency, value-based care initiatives, and process improvements designed to enhance efficiency.
• Cost reduction initiatives should focus on margin improvement without sacrificing patient care, quality outcomes, employee engagement, or future growth initiatives. These initiatives often include workforce scheduling optimization, contract labor reduction, and retention.
• Labor shortages across the industry, particularly in nursing, are driving wage inflation. Retaining current employees, reducing burnout, telehealth and virtual care models, and expanded use of technology are key strategies to combat labor shortages.
• Strategic growth planning often includes evaluating service line profitability, expanding outpatient services, focusing on mental health services, and pursuing partnerships, affiliates, mergers, or acquisitions.

Workforce Challenges

Boardroom conversations are evolving beyond the “find more nurses” mentality and focusing on workforce-related risks that affect financial performance, patient outcomes, growth, and organizational sustainability. However, nursing shortages still remain a top concern.

• Nursing shortages continue to be driven by an aging workforce, burnout, early retirements, and limited nursing school capacity, creating significant challenges for patient access and operational efficiency.
• Physician recruitment remains difficult as demand continues to outpace available supply. Association of American Medical Colleges (AAMC) workforce projections continue to indicate physician shortages across primary care and several specialty areas, including psychiatry. Further, the HRSA Health Workforce projections indicate specialties with the lowest supply adequacy by 2038 are vascular surgery (66%), ophthalmology (72%), thoracic surgery (73%), plastic surgery (74%), and family medicine (76%). Organizations frequently compete against multiple employers for a limited pool of qualified candidates.
• Workforce retention and succession must be addressed. Retaining existing employees remains the most effective workforce strategy and should be supported through leadership development, career growth opportunities, and comprehensive succession planning.
• Burnout is characterized by emotional exhaustion, detachment from patients and colleagues, and a reduced sense of professional accomplishment. Administrative burdens, staffing shortages, and increasing workplace demands continue to contribute to burnout across the healthcare industry. Burnout also contributes to turnover, recruitment challenges, staffing costs, and potential quality-of-care concerns.

Final Thoughts

Healthcare organizations that proactively address the above challenges by strengthening governance, improving operational efficiency, investing in their workforce, and embracing innovation will be best positioned to enhance patient outcomes, maintain financial sustainability, and deliver high-quality patient care in an increasingly complex healthcare environment in the years ahead.

McKonly and Asbury has expertise in assisting healthcare organizations with financial statement audits, tax services, cybersecurity assessments, fraud and risk management, and HIPAA compliance assessments. If your company needs any guidance and support or to learn more about McKonly & Asbury’s Healthcare practice, please contact the Healthcare practice Leader and Partner, Janice Snyder.

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