While the healthcare industry has largely stabilized in 2025 following the impact of the pandemic, providers are continuing to manage through industrywide headwinds including inflationary pressures, a tight labor market, cybersecurity threats, regulatory uncertainty and strained payor relationships. Although there is certainly no shortage of challenges, providers are hopeful that technological advancements will increase efficiency and improve patient care.

The third annual PNC Healthcare Provider Survey featured responses from C-Suite executives at 27 U.S.-based health systems collected through in-depth interviews. The health systems spanned 17 states from coast-to-coast, with more than half having $2+ billion in revenue and over 85% being not-for-profit. The survey was conducted by PNC Healthcare during the first quarter of 2025.

In discussions with the participating hospitals and health systems, PNC Healthcare leaders asked them to rank their top three Short-Term (12-24 months) and Long-Term (2-5+ years) concerns from industry challenges that have been garnering headlines. The list of concerns included: 

  • Inflationary Pressures
  • Labor
  • Technology Infrastructure
  • Impact of New Administration in DC
  • Payor Relationships
  • Industry Consolidation
  • Interest Rates

The Results

Top short-term concerns:

  • Labor (22%)
  • Impact of New Administration in DC (20%)
  • Inflationary Pressures (19%)
  • Payor Relationships (19%)
  • Technology Infrastructure (17%) 

Chart 1 - Top Aggregate Short-Term Concerns

Source: 2025 PNC Healthcare Provider Survey

View accessible version of this chart.

Top long-term concerns:

  • Labor (28%)
  • Payor Relationships (21%) 
  • Technology Infrastructure (20%)
  • Inflationary Pressures (14%)
  • Impact of New Administration in DC (14%)

Chart 2 - Top Aggregate Long-Term Concerns

Source: 2025 PNC Healthcare Provider Survey

View accessible version of this chart.

Notably, labor was the top-mentioned short-term and long-term concern for the third year in a row as providers continue to face a tight labor market. However, it was closely followed by inflation, payor relationships, the impact of the new administration in DC, and technology infrastructure, indicating that providers’ attention is split across multiple competing priorities.

Of the providers surveyed, 59% represent health systems with greater than $2 billion in revenue, while the remaining 41% are below this threshold. Although all respondents faced the same overall set of concerns, there was a clear difference in priorities. Larger systems were more likely to be concerned about technology infrastructure and changes from the new administration, while smaller systems were more likely to rank payor relationships higher on their lists.

Chart 3 - Top Short-Term Concerns Ranked by System Revenue Size

Source: 2025 PNC Healthcare Provider Survey

View accessible version of this chart.

Chart 4 - Top Long-Term Concerns Ranked by System Revenue Size

Source: 2025 PNC Healthcare Provider Survey

View accessible version of this chart.

 

Key Takeaways

Five key themes emerged from our discussions that shed some light on what is really driving healthcare providers’ concerns:

1. Labor shortages and inflation are still pressuring hospitals’ bottom lines.

Although operating performance has largely stabilized relative to post-pandemic lows, respondents indicated that they still view labor and inflation as headwinds. Labor costs remain elevated relative to pre-pandemic levels despite a decline in contract labor, and it is unlikely that wages will drop significantly going forward. Inflation, particularly as it relates to the cost of medical supplies and drugs, has also put pressure on hospitals’ bottom lines. Most respondents expect labor supply issues to subside eventually as they benefit from a pipeline of talent from partnerships with educational programs. Technological advancements like artificial intelligence also have the potential to generate cost savings to offset some of these pressures in the long term, although some respondents were skeptical that these solutions would lower labor costs in the long run. In another effort to drive margin growth, several respondents noted that they were making large investments in higher acuity service lines.

2. The new administration in DC has created a wave of uncertainty.

In aggregate, “Impact of the New Administration” was the second most-mentioned short-term concern with multiple providers ranking it as their number one concern. Providers cited uncertainty related to the future of Medicare/Medicaid, tax-exempt financing, and the impact of newly imposed tariffs on already strained supply chains as primary drivers of this concern. The tariffs have the potential to drive up the already elevated costs of medical supplies, devices, and pharmaceuticals that ultimately get passed on to patients and their employers. Inflation woes are fueling market volatility, with the volatility index at 30.5 as of April 14, 2025, up 70% year-to-date. Concurrently, the future of Medicare/Medicaid and tax-exempt financing is still unknown, and this uncertainty is spurning borrowers to go to market to lock in tax-exempt rates. Q1 tax-exempt healthcare bond issuances are up 16% year-over-year. All of these factors create significant headwinds and challenges for providers to remain financially solvent against the backdrop of a heightened focus on the affordability of healthcare.

3. The gap between large and small health systems is getting wider.

Now more than ever, the gap between midsize and large health systems is widening. The impact of labor costs on operating margins is more significant for midsize healthcare providers, as is the tenuous relationship with payors. Midsize hospitals and health systems have had limited success negotiating payor reimbursement rates, resulting in slimmer operating margins compared to larger competitors. Comparatively, the largest providers of healthcare have had greater success controlling expenses and improving reimbursement rates, while driving revenue growth through market expansion and consolidation. 

As short- and long-term concerns have shifted between midsize and large health systems, so have their priorities. During our inaugural PNC Healthcare Provider Survey, published in May 2023, the top three short- and long-term concerns were agnostic of hospital size. Unsurprisingly, virtually all respondents were focused on labor costs, inflation, and supply chain bottlenecks. While labor is still a top three short- and long-term concern for the majority of health systems surveyed, regardless of size, the results deviate from there. Large health systems cited “Impact of the New Administration” and “Technology Infrastructure” among their top concerns, while midsize health systems cited “Payor Relationships.” Large health systems have the resources to prioritize technology as a driver of operational efficiency, while mitigating vulnerabilities across their geographical footprints. This does not exclude midsize health systems from being concerned with technology or the new administration; however, controlling operating expenses and labor costs, while improving payor reimbursement rates, remain paramount.

4. Cyber threats are here to stay.

Providers are continuing to invest in cybersecurity and implement protocols to protect against cyber threats and fraudulent activities, especially following the Change Healthcare ransomware attack that occurred in early 2024. This event underscored the threat that cyberattacks pose even for systems with a robust cybersecurity infrastructure in place, revealing the risk associated with reliance on third party vendors. Providers are paying close attention to current and future cybersecurity infrastructure and implementing practices that will mitigate these risks. Such practices include hiring personnel assigned to address cybersecurity threats, requiring multifactor authentication and various trainings for employees, managing vendor risk, and proceeding with further investment in front-end prevention. Most survey respondents noted that email phishing and fraud protection are the largest areas for improvement. 

5. Providers are cautiously optimistic about the future of AI in healthcare.

Artificial intelligence continues to be of interest to providers as it poses an opportunity to provide efficiency gains in areas concerning denials, administrative work, and cost of care. The interest in implementing such tools varies depending on reasons for use and fully understanding return on investment. With this, providers are performing research, piloting programs, and exploring how they can leverage existing programs for collaboration such as with Epic, Workday, and CoPilot. Summarizing the opportunity ahead, one respondent stated, "AI is a game-changer poised to transform patient care, efficiency, and innovation. The challenge is leveraging it wisely while navigating financial and operational complexities." 

Based on these themes, it is clear that providers are still facing significant headwinds, which are only exacerbated by a heightened focus on the affordability of healthcare. The gap between large and midsize health systems is widening as providers continue to face heightened labor costs, tense payor relations, market uncertainty, and the need for sophisticated technology. PNC Healthcare is fully dedicated to being an industry thought leader and partner as providers continue to manage these headwinds.

Once again, we would like to thank all the organizations who participated in the 2025 PNC Healthcare Provider Survey and provided valuable insights. We sincerely appreciate your time and continued partnership.


Accessible Version of Charts

 

 

Short-term Concerns All Healthcare Providers
Inflationary Pressures 19%
Labor 22%
Technology Infrastructure 17%
Impact of New Administration 20%
Relationships with Payors 19%
Industry Consolidation 1%
Interest Rates 1%

Source: 2025 PNC Healthcare Provider Survey

 
Long-term Concerns All Healthcare Providers
Inflationary Pressures 14%
Labor 28%
Technology Infrastructure 20%
Impact of New Administration 14%
Relationships with Payors 21%
Industry Consolidation 3%
Interest Rates 0%

Source: 2025 PNC Healthcare Provider Survey

 

 

Short-Term Concerns (aggr) Greater than $2B Less than $2B
  % of Aggr 1 % of Aggr 2
Inflationary Pressures 19% 18%
Labor 21% 24%
Technology Infrastructure 21% 12%
Impact of New Administration 25% 12%
Relationships with Payors 10% 30%
Industry Consolidation 2% 0%
Interest Rates 2% 0%

Source: 2025 PNC Healthcare Provider Survey

Long-Term Concerns (aggr) Greater than $2B Less than $2B
  % of Aggr 1 % of Aggr 2
Inflationary Pressures 13% 16%
Labor 27% 28%
Technology Infrastructure 25% 13%
Impact of New Administration 17% 9%
Relationships with Payors 17% 28%
Industry Consolidation 0% 6%
Interest Rates 0% 0%

Source: 2025 PNC Healthcare Provider Survey