One Big Beautiful Bill Act (OBBBA) Summary: 4 Key Strategies for Turning Disruption into Opportunity

Key Takeaways:

• H.R. 1, the “One Big Beautiful Bill Act,” was signed into law on July 4 and makes sweeping changes to Medicaid and Medicare, ACA subsidies and more.
• By anticipating and understanding these shifts, healthcare providers can reimagine care delivery and lead through this transformative moment in U.S. health policy.
• The path forward requires public/private collaboration — with policy leaders prepared to present bold solutions backed by data-driven insights and whole-person perspectives.
• Premier’s comprehensive solutions can help providers manage the pressures of the OBBBA while preparing for a better, smarter, faster healthcare future.

The Trump Administration’s domestic agenda bill H.R. 1, known as the One Big Beautiful Bill Act (OBBBA), was signed into law on July 4 and has significant implications for healthcare in the United States.

In particular, providers are most concerned about the twin hits of Federal Medicaid spending cuts of $793 billion over a decade, plus $268 billion in reduced spending for Affordable Care Act (ACA) marketplace subsidies — totaling over $1 trillion in cuts. These reductions are expected to increase the number of uninsured patients, while reductions in provider taxes also limit states’ ability to raise revenues in support of healthcare programs.

Together, this combination will have financial consequences for hospitals, with success or failure in the new environment substantially contingent on how well providers can execute resiliency planning in the face of this coming storm. Though the bill's provisions will not take effect immediately, with the earliest implementation timelines in late 2026, it is critical that healthcare providers prepare now.

While the bill introduces real challenges, it also creates a rare inflection point — a chance for healthcare leaders to convene, innovate and shape the future of care delivery.

What Providers Should Do: Embrace the Disruption, Lead the Transformation

Passage of OBBBA is not just a policy shift — it's a call to action. What follows are near-term recommendations that providers can use to prepare for implementation in this new environment.

1. Tackle Total Margin Management

Healthcare providers must take immediate, data-driven steps to model financial impact and identify levers for value-driven performance.

Starting with revenue and reimbursement baselines and managing to Medicaid and Medicare margins is a key first step. Providers should model the delta in revenue/reimbursement under the bill’s provisions — especially Medicaid reductions, Medicare PAYGO cuts and the changing payer mix. Models should further layer in and adjust for patient volume shifts as a result of deferred or avoided care due to lack of coverage, increased emergency department utilization by uninsured populations, and/or a decline in patients’ access to social supports and transportation.

Once the scenario planning is complete, shift the focus to action — leveraging data to identify and control total cost of care:

• Utilize analytics, such as those from Premier’s cost management solutions, to pinpoint where avoidable utilization is likely to spike — by geography, patient segment or clinical condition.
• Rethink contracting, procurement and supply chain operations to support resilience, affordability and alignment with new care models. The end-to-end supply chain is ripe for realizing savings, accomplished by harnessing a powerful blend of:
  • Standardization.
  • Participation in a robust group purchasing organization (GPO) to leverage collective volume and maximize savings.
  • Contract penetration.
  • Strategic management of purchased services.

In particular, volume-based discounts obtained through GPO contracts can help smaller and more rural organizations that may be disproportionately affected by the coming cuts. Through advanced automation and robotic process automation (RPA), organizations can streamline operations, reducing the need for manual intervention and enabling teams to do more with fewer supply chain workers. Outsourcing select functions to leverage scale can also amplify efficiency and innovation and enable speed to value. Meanwhile, value-based contracting helps ensure that every dollar spent is aligned with quality and measurable outcomes.

• Maximize reimbursement by leveraging a top-tier quality technology suite, offering the tools to help monitor, predict and reduce avoidable readmissions and adverse events that carry significant reimbursement penalties, while also proving higher quality and value. Additionally, an advanced, artificial intelligence (AI)-enabled coding solution surfaces real-time opportunities to optimize and automate risk-based adjustment across Hierarchical Condition Categories (HCCs) for more accurate reimbursement. Anticipating the headwinds of a new portfolio of payer mixes for patients, Premier’s revenue cycle team is also poised to help educate and engage your changing patient population around the financial planning for services to proactively mitigate payment disruptions.
• Drive financial stewardship and eliminate waste. In the clinical decision support (CDS) space, look for a cost attribution technology that defines low-value care and makes costs transparent in real time. A leading solution marries clinical and financial data at the point of care to help providers create financial efficiencies and remove waste while helping them deliver care that is better and safer for patients. Providers should also consider deploying service line analytics that can provide a holistic view of how products and medications impact the bottom line and contribute value to patients.

2. Speed the Move to Value-Based Care Arrangements

The Medicaid and ACA cuts in OBBBA may leave hospitals with a higher share of uninsured and underinsured patients, meaning more care delivered with little or no fee-for-service (FFS) reimbursement. As a result, health systems should start to see value-based care not just as a choice, but as a survival strategy to avoid “death by a thousand cuts” in an increasingly restrictive payment landscape.

Alternative payment models reward care coordination, chronic disease management and prevention — strategies that reduce costs and can mitigate financial losses from the OBBBA’s cuts. In addition, these models have ancillary benefits. These include creating greater alignment with primary care and specialist physicians and incentives for the creation of social support structures that help uninsured or underinsured patients better manage conditions to remain out of expensive care settings.

But shifting to a value-based care model can be bumpy, requiring upfront infrastructure investments, cultural transformation and longer revenue cycles as payments are reconciled against year-end performance metrics.

To prepare, health systems must conduct a clear-eyed assessment of where they stand today from both a contractual and operating capabilities perspective. This means understanding what portion of contracts already tie payment to performance, how financially and operationally ready they are to take on risk and which patient populations they’re best positioned to manage. Providers in the value-based care landscape should also actively explore how Section 1115 Medicaid waivers can facilitate innovative approaches to care delivery and payment reform.

Additionally, the transition requires investment in analytics tools, registries to track chronic conditions and embedded care coordination models that reach into partnering physician groups (both owned and out of network) and other providers across the care continuum. The shift demands a redesign of clinical workflows — moving from episodic care toward team-based, longitudinal models that prioritize prevention, care transitions and virtual engagement. Internal incentives must align with these new priorities, just as contracts with payers evolve to include shared savings, bundled payments or capitation.

While the transition can be daunting, those making the move are best advised to consider data-driven collaborative models where they can learn from early pioneers who have already adopted and are succeeding in value-based care arrangements.

3. Deploy Technology to Optimize

In today’s resource-constrained healthcare environment, technology is no longer a nice-to-have — it’s a necessity. That’s where advanced technology, particularly AI, becomes critical.

Intelligent automation and data-driven decision-making help providers transform their operations. By embedding AI into everyday workflows, organizations can reduce the number of full-time equivalents (FTEs) needed to complete routine or repetitive tasks, from supply chain tracking and revenue cycle management to clinical documentation and care coordination.

Leading solutions go beyond simple automation. Advanced analytics and AI-powered solutions drive efficiency gains by flagging process breakdowns, standardizing best practices and surfacing actionable insights. For example, workforce optimization tools can help realign staff to demand, while supply chain analytics reduce variation and identify cost-savings opportunities. In areas such as claims processing, AI not only helps accelerate throughput, but improves accuracy and reduces denials — directly impacting the bottom line.

The result? Streamlined operations, smarter resource allocation, reduced costs and more bandwidth for providers to focus on what matters most: delivering quality care.

4. Pursue Public Health Engagement

As health systems face growing pressure to improve outcomes while managing tighter margins, collaboration is rapidly becoming a financial imperative. Many health systems continue to build and operate community-facing programs that overlap significantly with services already provided by both payers and local health departments (LHDs). Such initiatives include maternal health outreach, immunizations, home visits and health education. While well-intentioned, this duplication is both costly and inefficient.

At the same time, public health programs have suffered budget cuts, making them more receptive than ever to innovative partnerships with private sector organizations and non-profit healthcare to achieve shared goals. Essentially, both parties are looking to combine forces to continue servicing communities in need.

Working together, health systems can leverage the resources available through LHDs, which are already embedded in communities — often delivering these services at lower cost due to established infrastructure, public funding and community trust. By pooling resources rather than duplicating them, health systems can extend their reach, reduce overhead and improve outcomes in ways that also improve the bottom line.

Moreover, in value-based care models, providers are often financially accountable for total cost of care. Partnering with LHDs and public and private payers to address upstream needs such as immunization, prenatal care or chronic disease outreach reduces unnecessary ER visits, inpatient admissions, etc., which can, in turn, boost shared savings performance.

As a first step, provider leaders should request a system-wide inventory of community-facing programs and services, specifically identifying overlap with those provided by LHDs or community-based organizations. From there, informed choices can be made around opportunities for consolidation, co-investment or shared service models to improve impact and financial sustainability.

How Premier Can Help

Premier brings a host of solutions together to help providers manage the pressures of the OBBBA while preparing for a better, smarter, faster healthcare future.

• Premier’s advisory experts partner with organizations to unlock efficiencies, transform operations and drive enterprise margin improvement. As one example, Premier’s embedded advisory team helped Prisma Health achieve $450 million in savings over three years, implementing customized strategies, advanced technology and data-driven solutions to enhance performance and outcomes.
• Premier’s Population Health Management Collaborative (PHMC), advisory services, advocacy efforts, and data and technology solutions help providers accelerate the transition to value-based care. For instance, PHMC collaborative members consistently outperform the nation in total cost of care models — earning over $302 million in Medicare Shared Savings Program (MSSP) and ACO REACH performance payments in 2023. Regardless of an organization’s progress on the journey, Premier can provide the solutions necessary to continue advancing.
• Premier brings together the tools, data and expertise needed to help health systems better partner with state Medicaid agencies and public health departments in order to lead through complexity. Whether improving maternal health, reducing readmissions or modernizing care delivery, Premier is a trusted partner in building a more efficient and resilient healthcare system.
• With one of the largest healthcare industry datasets, robust benchmarking capabilities, leading cost management and quality technology, and more, Premier’s innovative technology suite and actionable data support better outcomes and provider success. Premier’s Stanson Health has a new hospital cost management decision support solution that significantly reduces acute care waste. It also offers an AI-powered coding optimization solution that enabled ThedaCare to improve its HCC coding processes and gain a clearer view of population risk, a strategic asset for better care, planning and outcomes.

Let’s turn uncertainty into momentum — together. Learn more about our comprehensive solutions and connect with our team today.