Reflections on 2025 and What Hospital Leaders Must Prepare for in 2026

Written By: Jimmy Leppert

As we close the chapter on 2025, we’ve spent time reflecting on what we learned alongside the hospital and health system leaders we partner with at Empactful Advisors.

Last year was defined by pressure – financial, operational, and human. Margin compression, workforce fatigue, rising acuity, and constant external disruption forced leaders to confront hard truths. But 2025 was also a year of clarity. Across organizations of different sizes, markets, and governance models, the same patterns emerged again and again.

The leaders who made progress weren’t chasing sweeping transformations. They were closing gaps – deliberately, relentlessly, and with focus.

Those lessons now shape our outlook for 2026.

Below are the biggest takeaways from 2025 and what they signal about the year ahead.

1. In 2025, Leaders Learned the Gap Is the Work. In 2026, Gap Discipline Will Separate Survivors from Stalled Systems

   For many hospitals, the core challenge in 2025 wasn’t strategy; it was the widening distance between current performance and stated goals. Leaders knew where they wanted to go: margin recovery, access expansion, length-of-stay reduction, workforce stabilization. What they often lacked was a shared, quantified understanding of how far away they truly were.

   High-performing organizations treated gap identification as an ongoing discipline, not a one-time planning exercise. They quantified gaps clearly, revisited them frequently, and aligned leaders around what “good” actually looked like. Most importantly, they stopped normalizing underperformance.

   The 2026 prediction: Hospitals that fail to operationalize gap-to-goal discipline will drift. Those that embed it into leadership routines – using it to prioritize, allocate resources, and drive accountability – will move faster with less noise.

   You can’t close what you won’t name. And in 2026, naming it won’t be optional and getting to it early this year will be key!

2. In 2025, Execution Beat Elegance. In 2026, Execution Will be the Strategy

   In 2025, execution became the great differentiator. Hospitals under sustained pressure did not have the luxury of long planning cycles or perfectly architected initiatives. The leaders who made real progress focused on fewer priorities and executed them exceptionally well. They built operating rhythms that emphasized accountability, rapid problem-solving, and follow-through.

   Time and again, we saw complex plans stall while simple, clearly owned actions delivered results. Weekly tracking, visible metrics, and decisive ownership turned intention into impact.

   The 2026 prediction: Execution will no longer be viewed as a downstream activity; it will be recognized as the strategy itself. Boards and executive teams will increasingly ask not what the plan is, but how fast it can move and who owns the outcomes.

   Clarity plus consistency will continue to outperform sophistication.

3. In 2025, Margin Became an Enterprise Issue. In 2026, Operational Margin Management Will Be Non-Negotiable

   Margin pressure was universal in 2025, but responses varied widely. The most resilient organizations stopped treating margin as a finance-only problem. Clinical leaders understood how throughput, variation, and staffing models affected financial performance. Operational leaders were given real-time data and the authority to act on it.

   Rather than chasing one-time fixes, these systems focused on closing margin gaps sustainably through improved flow, reduced variation, and better execution at the front line.

   The 2026 prediction: Hospitals that cannot translate financial targets into operational action will struggle. Those that embed margin awareness into daily management - without sacrificing quality or trust - will stabilize faster and gain strategic flexibility.

   Margin won't improve through heroics. It will improve through management.

4. In 2025, Focus Emerged as a Core Leadership Skill. In 2026, Focus Will Be a Cultural Advantage

   Hospitals were asked to do more with less in 2025 – less labor flexibility, less financial cushion, and less tolerance for missteps. In that environment, focus became one of the most valuable leadership capabilities.

   
   

   Strong leaders made hard choices about what not to work on. They protected frontline teams from initiative overload and narrowed priorities to create space for progress. Focus wasn’t about doing less; it was about doing the right things well enough to matter. The result: reduced burnout, improved trust, and faster results.

   
   

   The 2026 prediction: Organizations that continue to layer initiatives without pruning will see execution fatigue deepen. Those that lead with disciplined focus will build cultures capable of sustained performance – even under pressure.

   Focus will increasingly be a competitive advantage.

5. In 2025, the Most Effective Help to Build Capability. In 2026, Capability-Building Will Matter More Than Advice

   One of the clearest lessons from 2025 was this: hospitals don’t just need answers; they need the ability to execute under pressure again and again. The most impactful work wasn’t about delivering recommendations. It was about strengthening execution muscles, building leadership confidence, and installing systems that made progress repeatable. When leaders learned how to close gaps themselves, momentum accelerated – and stuck.

   
   

   The 2026 prediction: Hospitals will increasingly seek partners who leave them stronger, not dependent. Capability-building – especially around execution, prioritization, and decision-making – will define the next generation of advisory relationships.

Looking Ahead to 2026

The pressures facing hospitals are unlikely to ease quickly. Financial constraints, workforce realities, and external uncertainty will remain. But the lessons from 2025 offer a clear path forward:

• Close the gap to goal - explicitly and continuously

• Start now so that you are off to a strong start

• Treat execution as the strategy

• Manage margin through operations, not just finance

• Lead with focus under pressure

• Build capabilities that endure

At Empactful Advisors, we're deeply grateful for the trust our clients place in us and inspired by leaders who choose action over paralysis and progress over perfection. The work is hard, but it's meaningful. And in 2026, it will matter more than ever.