Innovation Is Outpacing Reimbursement, Health System Execs Warn

Health care affordability has reached a crisis point that no single stakeholder can solve alone, and reimbursement structures have not kept pace with either the shift toward prevention or the pace of clinical innovation, according to 4 health system executives during a Chief Healthcare Executive® Peer Exchange roundtable.

The discussion, moderated by Stephanie Wierwille, executive vice president of strategy and innovation at BPD, brought together Robert Garrett, FACHE, CEO of Hackensack Meridian Health; Benjamin P. Levy, MD, clinical director of medical oncology at Johns Hopkins Sidney Kimmel Cancer Center; Deepak L. Bhatt, MD, MPH, MBA, director of the Mount Sinai Fuster Heart Hospital at the Icahn School of Medicine; and Kevin Beiner, chief operating officer of Northwell Health.

Why Are Health Systems Pushing Prevention as a Cost Lever?

Bhatt argued that hospitals remain financially optimized around treating the sick, even though a large share of net margin still comes from high-acuity cardiovascular and oncology services. He said the industry has cycled through this same conversation before, dating back to the health maintenance organization reforms of the early 1990s,¹ without breaking the pattern.

"One thing that would improve outcomes and ultimately help reduce health care costs for everyone is to do a better job with prevention," Bhatt said, adding that the real barrier is designing reimbursement models that pay for keeping people healthy rather than only treating them once they are sick.

Garrett pointed to Hackensack Meridian's social determinants of health screening program, which has reached more than 3.5 million patients and refers them to community agencies for issues such as transportation and food insecurity. He also flagged inadequate behavioral health reimbursement as a driver of cost, noting that children and adolescents are waiting days or weeks for psychiatric beds in New Jersey emergency departments, a problem he said will worsen as Medicaid cuts take effect. Garrett has called for a statewide health care affordability summit that would bring providers, insurers, drug companies, and device makers to the table together.

"We need to step up and address the affordability crisis, and I think there are ways we can do that," he said.

How Are Payer Disputes Disrupting Patient Care?

Reimbursement tension has already spilled into direct patient harm, panelists said. Levy described a contract dispute between Johns Hopkins and a payer that collapsed after clashes over prior authorizations, treatment denials, and delayed payments, ultimately leaving longtime oncology patients unable to continue seeing their physicians. "It comes back to the patients: how are they going to be taken care of?" Levy said.

Garrett described a similar episode at Hackensack Meridian, where a payer's policy of notifying patients about a possible network exit interrupted chemotherapy and radiation treatment for hundreds of patients before the underlying contract dispute was resolved. He called the practice "immoral and unethical," saying his system worked to reassure patients and ensure safe handoffs where care could not continue.

Bhatt said the pattern is playing out nationally with increasing frequency and argued it warrants stronger regulatory oversight.

"I don't think putting patients in the middle of that is the right thing to do, and that's an area I think probably there needs to be greater regulation, perhaps at the state level or perhaps at the federal level," Bhatt said.

Beiner added that negotiating leverage with payers is increasingly shaped by public and political pressure rather than by health system size alone and said providers already lose money delivering care to Medicaid patients even before factoring in disputes. Northwell is currently operating on roughly a 1% margin by choice, prioritizing essential community resources, such as serving as a major behavioral health provider and keeping emergency departments open, over profit, even as top-line reimbursement pressures mount.

Why Isn't Reimbursement Keeping Pace With Innovation?

Panelists said payment models are also lagging behind clinical advances designed to lower costs and improve outcomes. Bhatt cited pulsed field ablation, a newer, faster procedure for atrial fibrillation with strong outcomes and same-day discharge potential, that nonetheless reimburses hospitals at a lower rate than the procedures it is replacing.

"You've got a procedure that's actually better, but a hospital is going to make less money as it gets adopted," Bhatt said.

Garrett raised a parallel problem on the regulatory side: New Jersey rules still require higher-intensity cardiac procedures to be performed in academic medical centers rather than lower-cost ambulatory settings, even as health systems invest in expanding ambulatory and home-based care. He said many of the relevant regulations date to the 1960s and 1970s and have not been updated to reflect where care is now delivered.

Levy noted that affordability pressure is also acute at the pharmacy level; his clinic's patient-assistance team has grown from a single nurse and a financial advisor to 5 people simply to manage prior authorizations, appeals, and co-pay assistance for oral cancer therapies.

What's Blocking a Larger Shift to Value-Based Care?

None of the 4 systems reported a large-scale transition to value-based care, despite years of anticipation. Hackensack Meridian has seen savings through the Medicare Shared Savings Program and bundled joint-replacement initiatives, but fee-for-service still accounts for most of its revenue, Garrett said. He identified misaligned downside-risk incentives between providers and insurers as the central obstacle: systems have seen gains under upside-only arrangements, but risk-sharing on the downside remains unresolved.

"There has to be a true balance in risk-sharing between provider and insurer," Garrett said.

Bhatt, who previously served on the American College of Cardiology's board of trustees, said value-based care has been described as imminent for years without materializing at scale, in part because a full transition would disrupt the current fee-based revenue base that keeps systems running. Beiner said Northwell has been building the necessary tools and infrastructure for value-based contracts without major results to show yet, calling the approach "doing more with less, or doing high quality with less."

What Would It Take to Bend the Cost Curve?

Panelists broadly agreed that affordability solutions will require shared accountability among providers, insurers, drug makers, and government payers, rather than actions from health systems alone. Garrett said reimbursement and regulation both need to catch up to where care is actually being delivered, while Bhatt said the country is approaching a tipping point after decades of rising health care costs as a share of gross domestic product. Beiner framed the issue in moral terms.

“We have an obligation to our communities and our patients, and if we do a good job, we'll expand access, and the aggregate cost may go up,” Beiner said. “But that should be a good thing if you're thinking about people who need basic health care."

This article is based on a Chief Healthcare Executive Peer Exchange roundtable discussion held June 19, 2026. Chief Healthcare Executive is part of MJH Life Sciences^®, the parent company of The American Journal of Managed Care^®.

References

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2. Palmer K. One health system’s six-year odyssey to meet its patients’ needs outside the clinic. STAT. July 14, 2022. Accessed July 15, 2026. https://www.statnews.com/2022/07/14/hospitals-screening-patients-social-economic-needs/