The forces shaping a health system’s future increasingly sit outside its walls

By Kate Caverno, SVP, Payer, Policy and Market Advisory, BPD

A health system can do everything within its control and still lose ground. It can build the right service lines, earn real trust, align its physicians, and invest in its mission—and still watch its margin erode. Why? Increasingly, the forces that decide whether a highly nuanced strategy pays off sit outside the organization’s own control.

Payers set the terms of reimbursement and keep changing them, using denials, prior authorization, and audits that have become standard operating procedure rather than exceptions. As they shift costs to employers, employers shift them onto their workforces, impacting how and by whom care is paid for. Policy sets the ground rules, and the current environment has created real pressure on Medicaid and Medicare funding, despite the daunting fact that roughly 10,000 Americans age into Medicare every day. Then there are potential changes to 340B and site-neutral payments, which could pull the financial safety-net rug out from under many systems. None of these forces answer to a CEO’s strategic plan, but all of them shape whether it works.

For a long time, health systems have treated this reality as a series of events. A contract fight, a regulatory change, a hard quarter with a major payer, the closure of a neighboring system that changes the market dynamics—each one gets handled as an issue or crisis, with a scramble of communications and stakeholder outreach, and then things go quiet until the next event arrives. That approach made sense when the events were occasional. It does not hold when the pressure is constant.

At BPD Healthcare, we have spent years in those rooms. Across more than 1,400 negotiation engagements in 49 states, one pattern holds up almost every time: the outcome is usually decided well before the deadline, by whoever positioned their organization best in advance. The systems that struggle are usually the ones that start the conversation after the out-of-network crisis had already arrived, when their leverage was lowest and their options were narrowest.

Why it matters

Most growth models, including the one we use at BPD, organize around the things a health system can shape directly: patient demand, institutional trust, enterprise position, physician alignment, team engagement, and philanthropy. Those are the levers leadership can actually pull. But payer behavior, policy, and market dynamics do not belong in that list as one more lever. They cut across all of it. Payer terms affect patient access, network adequacy, and financial stability. Policy reform sets the rules for the strategies you employ. Market dynamics affect physician alignment, workforce, referrals and more.

The external environment is not one variable among several. It is the condition under which everything else operates.
That pattern, coupled with the changing industry environment, is why we have expanded what our team does for clients.

So we treat it that way. Alongside the intelligence layer that now runs across everything we do, payer, policy, and market strategy works as a second layer that touches every part of the growth model rather than sitting in a box beside it.

The practice has expanded to match, evolving into a Payer, Policy & Market Advisory function. Negotiation support remains the core—it is the moment clients most often call us for. Around it we now work year-round on policy exposure, market and competitive intelligence, and stakeholder strategy: reading the economic, political, and market forces bearing down on an organization, translating them into a strategy leadership can act on, and moving the people who influence the outcome—employers, brokers, patients, and policymakers.

None of this replaces what we have always done. When a negotiation reaches its hardest point, we are still in the room, and we still lead the industry in resolving disputes without disruption. What changes is the timing: we would rather help an organization shape its environment over the twelve to eighteen months before a pressure point than manage the fallout in the weeks after it.

For the executives who carry enterprise risk—the CFO, the chief strategy officer, the CEO—the practical question comes down to timing. These forces are going to shape the strategy either way. The choice is whether you engage them on your own schedule, with your narrative and your evidence ready, or react to them on theirs.

The best strategy in the world still has to survive contact with a payer, a policymaker, and a market that never agreed to it. Planning for that is what running the business of healthcare now requires. We’re ready for it.

If a pressure point is already on your calendar — a renewal, a policy exposure, a market shift you can see coming — that is the conversation worth having now.