Looking at the big picture, 2025 is proving to be a pivotal year for health systems and the healthcare industry writ large. Operating margins have continued their recovery since the pandemic: the median system’s margin was 3.0% in June, according to the latest flash report from Kaufman Hall¸ up from 1.1% one year ago. On the other hand, an array of policy and market shifts has already started to erode that progress.

The proverbial 1000-pound elephant in the room is the $1.3 trillion cut to Medicaid spending and other health programs contained in the Republicans’ massive budget reconciliation bill, which President Trump signed into law in July. While the Medicaid cuts have rightly dominated the conversation in recent months, they aren’t the only threats on the horizon. Beneath the headlines, there are other forces quietly reshaping the financial landscape for providers—factors that may not grab the same attention but could nonetheless steadily erode margins and strain operations.

For this week’s Key Market Dive, we’re taking a closer look at three other headwinds reshaping how health systems do business:

• The expanding use of prior authorization in MA and traditional Medicare

• Increasing adoption of ICHRA plans in the employer market

• The growing influence of commercial care navigation services.

Together, these forces are reshaping how patients enter the system, how care is reimbursed, and who holds sway over reimbursement. While each trend is distinct, the strategic pressures they generate are increasingly interconnected.