Health systems did not get the start to 2026 they were hoping for — and the numbers make that hard to ignore.
According to Becker’s Hospital Review, citing data from more than 1,900 U.S. hospitals, operating margins fell to -0.6% in January — the lowest point in 12 months, and a steep drop from 1.3% in December. Total expenses grew 5.4% year over year while revenue rose just 3.9%. Drug costs led the charge, up 6.8%, making them the fastest-growing non-labor expense on the P&L. For hospitals with fewer than 100 beds and those with more than 500, the margin pressure was most acute.
For health system leaders who started this year in budget planning mode, these figures aren’t a surprise. They’re a confirmation. The usual levers: labor efficiency, supply chain, and volume recovery are either already pulled or facing their own headwinds.
What the headline numbers don’t show is what’s happening inside the volume data.
Overall patient demand softened in January. Inpatient admissions fell 2.4% and outpatient visits were down 2.5%. But beneath that headline, the patient mix is shifting in a direction that should focus every health system leader’s attention. Genetics-related volumes grew 12.8%. Hematology was up 12.2%. Cancer volumes increased 10.6%. These are not peripheral service lines. They are among the most drug-intensive, reimbursement-complex, and clinically demanding specialties in a health system — and they are growing precisely when margins are contracting.
The patients are arriving. The operational infrastructure to serve them well and keep that revenue inside the health system often isn’t.
The problem hiding in plain sight
We’ve seen this dynamic play out across health systems of every size: a growing population of patients with complex, chronic conditions who need specialty medications, and a pharmacy operating model that wasn’t built to handle them at scale. When patients must fill specialty prescriptions outside their health system, what’s lost extends well beyond a single transaction. The care team loses visibility into a critical part of the patient’s journey. Outcomes become harder to track. The relationship that took years to build gets disrupted at exactly the moment the patient needs continuity most.
Patient leakage is a persistent challenge for health system leaders and it’s not simply a revenue problem. It’s a care quality problem. When the specialty pharmacy isn’t integrated into the care team, prior authorizations break down, therapy starts are delayed, and patients navigating high-stress diagnoses face avoidable friction on top of everything else they’re managing. These are the moments that define a patient’s experience with a health system, and too often, they’re the moments that fall through the cracks.
The root cause is almost always the same: fragmentation. Most health systems have assembled specialty pharmacy capability by layering point solutions — separate vendors for benefits investigation, prior authorization, 340B administration, dispensing, and compliance. Each tool may function in isolation. But the seams between them become the work. Handoffs break down. Exceptions go manual. Nobody has a clear view of what’s happening across the patient journey. And when audit season arrives, the documentation scramble begins.
When specialty pharmacy underperforms, the symptoms look like complexity. The root cause is almost always disconnection.
A different approach — and why it works
The health systems that are winning right now made a deliberate choice early: rather than assembling a patchwork of point solutions and hoping they’d integrate over time, they pursued a unified operating model — one that consolidates accountability, connects workflows across specialty and 340B operations, and builds performance measurement in from day one.
That model starts with governance. Specialty pharmacy touches clinical teams, revenue cycle, payer contracting, compliance, and patient support. When no single leader owns end-to-end performance, delays and rework are inevitable. Leading organizations designate a single executive sponsor responsible for the full picture, not just individual pieces of it.
Workflow design follows. The goal is to connect the moment a physician makes a prescribing decision to the moment a patient receives their medication with as few manual touchpoints as possible. Compliance and documentation get embedded in daily operations rather than bolted on before an audit. And performance gets measured in real time: time-to-therapy by payer and drug, prior authorization cycle time, referral capture versus leakage and abandonment rates with root cause visibility.
Building this right requires a depth of expertise in payer dynamics, limited distribution drug access, manufacturer relationships, 340B optimization, and specialty pharmacy compliance that most health systems are still developing. And that’s not a failure of leadership — it reflects the genuine complexity of the discipline. The health systems that have scaled the fastest typically didn’t build in isolation. They partnered with teams who brought proven infrastructure, established payer relationships, and operational playbooks developed across multiple implementations, compressing what would otherwise be a multi-year build into a significantly shorter path to performance.
A strong partnership isn’t a one-size-fits-all model. At its best, it’s a flexible approach that leverages a health system’s existing strengths and fills the gaps where outside expertise creates the most value — and critically, it preserves clinical independence. Treatment decisions, formulary authority, and patient care standards remain exactly where they belong, inside the health system. What changes is the operational backbone supporting them: technology integration, a purpose-built PSAO designed specifically for health system specialty pharmacy, 340B expertise, compliance infrastructure, and the ongoing performance management that turns a specialty pharmacy from a source of drag into a competitive asset. That last piece — a PSAO built around health system priorities rather than retail or PBM interests — is particularly consequential. It’s the difference between payer contracting that works for your program and network relationships that were never designed with your patients in mind.
When the operating model is built for integration from day one — with the right partners, the right infrastructure, and clear accountability — health systems are reaching performance milestones in months rather than years, turning a historically underutilized asset into a meaningful contributor to clinical and financial performance.
The window is open — but not indefinitely
The January data is a signal, not an anomaly. Drug costs are rising faster than nearly every other expense category. The patient mix is shifting toward high-complexity, high-drug-cost disease states. Outpatient care is growing faster than inpatient. These are durable structural trends and for health systems still managing specialty pharmacy as a peripheral program, the gap between where they are and where the market is heading is widening with each quarter.
For health system leaders evaluating their specialty pharmacy strategy, the path forward is clear: build an operating model capable of absorbing this complexity, or continue managing it through disconnected systems that compound it. The organizations that move now — with the right foundation and the right partners — will enter the next planning cycle with a specialty pharmacy that functions as a true strategic asset: capturing prescriptions that currently leak, accelerating access for patients who can least afford delays, and converting one of the fastest-growing cost centers on the P&L into a durable source of financial and clinical performance.
The most practical starting point is often the simplest: an honest accounting of where specialty prescriptions are leaving your system today, where therapy starts are being delayed, and where your current operating model lacks the integration to close those gaps. That diagnostic shapes everything that follows.
The window is open. The question is whether your organization is ready to take it.
Photo: Irina_Strelnikova, Getty Images
Marty Raborn is Senior Director of Trade Relations at Omnicell Specialty Pharmacy Services. A pharmacist with an MBA, he has experience spanning specialty pharmacy, managed care, market access, trade relations, and customer operations. Throughout his career, he has focused on the business and operational dynamics of specialty pharmaceuticals and healthcare delivery.
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