The 2026 Wound Care State of the Union: Your Survival and Strategy Guide

A Hospital Landscape Under Pressure — And the Leaders Who Will Define What Comes Next

In 2025, 23 hospitals closed their doors. From rural Oklahoma to the heart of Chicago, these closures happened for different reasons — but they share one common thread: a healthcare system under pressure from every direction.

Urban hospitals lost CMS contracts over compliance failures. Rural hospitals bled service lines from underinvestment and leadership churn. Margins rose in one region while collapsing in another. The divide isn't slowing — it's accelerating. Over 700 hospitals remain at risk of closure in 2026.

But here's what the closures don't tell you: Hospitals are no longer just 'surviving' — they are deleveraging. Moody's and Fitch issued 73 hospital upgrades in 2025 — nearly matching the 75 downgrades for the first time in years. The agencies are rewarding something specific: capital agility. Hospitals that can drive 12-month ROI and strengthen operating margins while their competitors wait a decade for new towers to break even. Hospitals that stabilize balance sheets, reduce contract labor costs, and pivot to high-margin outpatient service lines before the next wave of policy changes hits.

The question for wound care and hyperbaric oxygen therapy (HBOT) leaders isn't whether your hospital is under pressure. The question is whether your program is positioned as essential infrastructure — the kind that survives consolidation, earns credit upgrades, strengthens revenue cycle management, and becomes a competitive advantage when others are cutting to survive.

Because when hospitals consolidate, they don't eliminate revenue-resilient service lines. They double down on them.

What Wound Care Leaders Need to Know Before the Next Policy Wave Hits

Q: Why are hospitals closing — and what does that mean for wound care programs?

A: Hospital closures are symptoms, not causes. The upstream pressures driving them:

• Site-neutral payment expansion: Medicare cuts off-campus hospital drug administration to 40% of prior rates (Jan 2026)

• The Medicaid cliff: Enhanced ACA subsidies expired, leaving 4.1 million uninsured and spiking uncompensated care costs by 11%

• Compliance crackdowns: CMS intensified oversight with AI-powered claim reviews hitting wound centers (Jan 2026)

• Aging facilities: Small hospitals averaging 15.1-year-old plants versus 11.2 years for large systems

• Staffing instability: Contract labor costs finally stabilizing but workforce gaps remain

But closures don't mean collapse across the board. They mean consolidation. And consolidation rewards programs that prove themselves essential.

Outpatient revenue jumped 12.8% in 2025 while inpatient crawled at 9.8%. The market is already voting. Wound care and HBOT aren't luxury service lines — they're revenue-resilient infrastructure that captures high-value outpatient volume, prevents costly complications, and generates positive ROI in under 12 months.

The hospitals earning Moody's upgrades right now aren't the ones with the biggest budgets. They're the ones with the highest liquidity and sharpest capital deployment. Renovating underutilized space into high-margin specialty centers instead of building $500 million towers they can't afford. Moody's calls it capital agility — and they're rewarding it with credit upgrades.

SHS Insight: We help partners position wound care and HBOT as essential, revenue-resilient service lines that remain viable even when hospitals are under pressure. By optimizing revenue cycle management and navigating 2026 site-neutral rules, we ensure these programs become the kind administrators fight to preserve, not eliminate.

Q: What are the biggest federal policy shifts shaping 2026?

A: The policy landscape moved significantly in the past six months — and the winners won't be the hospitals waiting for rescue. Federal dollars are flowing toward innovation and transformation, not life support.

One Big Beautiful Bill Act (July 2025): The landmark legislation everyone's been parsing includes real money and real restructuring:

• $50 billion Rural Health Transformation Fund distributed over five years ($10B annually, FY2026-2030)

• All 50 states awarded funding in December 2025, averaging $200M per state in Year 1

• Critical reality check: National Rural Health Association CEO made it explicit — this fund is "NOT designed to offset Medicaid cuts." It's for transformation and innovation, not keeping struggling programs on life support.

• 50% distributed equally across states, 50% based on rural population, facility counts, and hospital financial health

• $12 billion tied to "Make America Healthy Again" policies (nutrition education, Presidential Fitness Test, SNAP restrictions)

• 2.5% Medicare fee schedule increase — immediately offset by rising professional fees (up 10%) and site-neutral payment cuts

Medicaid Restructuring: The cuts are massive and the timelines are tight:

• $911 billion in federal Medicaid cuts over 10 years ($137 billion hitting rural areas directly)

• 17 million losing coverage by 2034, with 2 million losing it in 2026 alone

• Six-month eligibility reviews starting now (versus annual reviews previously)

• Work requirements for able-bodied adults must be implemented by December 31, 2026

• Enhanced FMAP (pandemic-era federal matching funds) fully expired in late 2025, forcing states to choose between massive budget gaps or cutting provider reimbursement rates

Grant Oversight Tightening: Executive Order 14332 requires political appointee review for all federal grants, resulting in a 33% decrease in new funding opportunities as of early 2026. The window for grant access is narrowing, not expanding.

The pattern is unmistakable: Federal policy rewards hospitals that demonstrate capital efficiency, community impact, and strategic alignment with administration priorities. Programs that can show 12-month ROI, measurable health outcomes, and transformation potential will compete successfully. Programs waiting for bridge funding to preserve current operations won't.

SHS Insight: We help partners align wound care and HBOT programs with evolving federal priorities — preparing documentation, staffing structures, and funding proposals before policy windows close. The Rural Health Transformation Fund favors programs that can demonstrate innovation, not preservation.

Q: How are reimbursement rules evolving for wound care and HBOT?

A: CMS fundamentally restructured the payment landscape in the past year — and the hospitals that adapted early are already ahead.

Cellular and Tissue-Based Products (CTPs): CMS officially rebranded "skin substitutes" as CTPs or Wound Care Management Products (WCMPs) in 2026. The feared flat rate ($125.38/cm²) got modified after industry blowback, but the new reality is just as significant:

• Product-specific bundling into APC groups with recalibrated rates

• High-cost products still bundled, but the across-the-board flat rate was avoided

• WISeR Model launch (January 2026): Six states (AZ, NJ, OH, OK, TX, WA) now require prior authorization OR pre-payment review for CTPs and other high-risk services

• AI and machine learning review systems operational as of January 5, 2026, with 72-hour turnaround for decisions

• "Gold card" exemption pilot planned mid-2026 for providers maintaining 90% approval rates

Site-Neutral Payment Expansion: As of January 1, 2026, Medicare cuts off-campus hospital drug administration services to 40% of prior rates. Hospitals are responding by "on-shoring" — moving wound care clinics back to main campus to preserve facility fee reimbursement. Off-campus wound centers now receive Physician Fee Schedule (PFS) rates instead of higher HOPD rates.

2026 Margin Watch: If your wound center is located more than 250 yards from the main hospital campus, your site-neutrality risk is at an all-time high. Check your CMS "excepted" status immediately.

340B Program Evolution: The rebate pilot was blocked by federal court in December 2025 and remains paused indefinitely as of February 2026. Meanwhile, operational challenges are mounting:

• Some manufacturers moving to rebate-only models even without the pilot

• Hospitals paying full wholesale price upfront, waiting up to six months for rebates

• Rebate denials based on documentation technicalities

• 340B hospitals managing significant cash flow pressure during the transition

HBOT Prior Authorization: More Medicare Administrative Contractors expanded prior authorization requirements in January 2026. Pre-clearance for diabetic foot ulcers and osteoradionecrosis cases is now standard in most regions.

The pattern is consistent: CMS is shifting from volume-based to value-based payment. Documentation quality, medical necessity justification, and compliance readiness are no longer optional.

SHS Insight: We help partners navigate site-neutral payment rules, 340B rebate lifecycle management, and WISeR prior authorization — protecting margins through coding optimization and audit-ready documentation.

Q: How is physician consolidation reshaping the referral landscape?

A: The physician employment wave didn't just arrive — it already reshaped the entire referral ecosystem. As of February 2026, 78% of physicians are employed by either hospital systems or corporate entities like Optum and CVS/Oak Street. Only 42% remain in private practice, down from 60% in 2012.

But employment is just the surface. The real shift is digital tethering.

The EHR Referral Lock: Employed physicians are increasingly locked into EHR-driven referral pathways that route patients exclusively to their system's own wound centers. Referral "leakage" — sending patients outside the network — has become a cardinal sin in value-based care models. For wound care leaders, this means your referral strategy can't rely on individual physician relationships anymore. You need system-level positioning.

The Optum Pivot: Optum executed a major strategic shift in January 2026, moving away from rapid geographic expansion toward "deep integration" in specific markets. They're designating certain physician clusters as "fully accountable" value-based hubs — and in those hubs, HBOT isn't just a billed service. It's a cost-saving tool measured by Per Member Per Month (PMPM) savings, not volume.

Payer-owned practices like Optum and CVS/Oak Street are now the fastest-growing segment of the referral market, and they speak a completely different language than traditional fee-for-service physicians.

The Site-Neutral Squeeze: Here's the irony: as hospitals buy physician practices, CMS is cutting physician payments in hospital settings by approximately 7% while increasing them in non-facility settings. This makes Hospital Outpatient Departments (HOPDs) for wound care more valuable, not less — they provide the facility fee stability that consolidated physician groups desperately need to maintain margins.

Meanwhile, medical professional fees are rising 10% across the board in 2026, according to Fitch. Consolidated systems are hunting for "efficiency plays" — and wound care that prevents a $50,000+ diabetic amputation fits that description perfectly.

The bottom line: Referral sources are centralized. Payer relationships are concentrated. And wound care programs that can speak both languages — traditional volume metrics for fee-for-service AND PMPM savings for value-based hubs — will capture referrals that others miss.

SHS Insight: We help partners adapt referral management strategies for a consolidated environment — building stronger ties with system-employed physicians, navigating payer-owned practice dynamics, and positioning wound care and HBOT as essential service lines that add value across the continuum of care.

Q: What compliance trends should wound care leaders be ready for?

A: Enforcement isn't just tightening — it already tightened. As of January 2026, wound care programs are operating in a fundamentally different compliance environment.

WISeR Model (Live Now): This isn't coming — it's here. Six states (AZ, NJ, OH, OK, TX, WA) launched mandatory prior authorization OR pre-payment review for cellular and tissue-based products (CTPs) and other high-risk services on January 15, 2026. AI and machine learning review systems became operational January 5, with 72-hour decision turnarounds.

If you're in one of these states and you're not submitting prior authorization requests through the participant portals or your MAC, you're facing pre-payment medical review on every claim. The "gold card" exemption pilot planned for mid-2026 will exempt providers with 90%+ approval rates — but you can't hit 90% if you're not tracking denials and fixing documentation gaps now.

AI-Driven Audit Expansion: Medicare Administrative Contractors aren't just reviewing more claims — they're using algorithmic anomaly detection to flag patterns. High CTP utilization, frequent HBOT treatments without clear medical necessity documentation, and billing patterns that deviate from regional norms are all triggering automated reviews.

The OIG is running parallel audits focused on "never events" and preventable complications. Home-acquired pressure injuries are gaining scrutiny as potential additions to the Serious Reportable Events list, which would make them publicly reported quality failures.

The Strategic Flip: Here's what most hospitals miss: compliance pressure is a competitive advantage for programs that are already prepared. When your regional competitor gets hit with denials, payment holds, or public quality violations, their volume drops. Their physician relationships weaken. Their administrators lose confidence.

Programs with audit-ready documentation, proactive chart reviews, and payer-aligned workflows don't just avoid penalties. They earn trust — from administrators who need service lines that won't become compliance headaches, from payers who see consistent approval rates, and from physicians who know their referrals won't get denied.

That trust translates into stability when budgets get tight and resilience when enforcement waves hit.

SHS Insight: Our compliance framework includes defensible documentation templates, monthly chart reviews, and training that aligns with payer logic and CMS expectations — building the approval track record needed for mid-2026 "Gold Card" exemption.

Are compliance pressures on hospitals still increasing?

A: They're not just increasing — they accelerated dramatically. CMS data shows a 79% increase in hospital complaints from 2019 to 2024, with many triggering formal investigations. State survey agencies are stretched thin, making oversight tougher and less consistent across regions.

But here's the paradox: inconsistent enforcement makes compliance more valuable, not less.

When oversight is unpredictable, hospital boards can't afford service lines that might become compliance headlines. CFOs can't risk payment holds on programs with questionable documentation. Medical staff leadership won't champion service lines that could trigger Joint Commission scrutiny or fire safety violations in HBOT chambers.

The Confidence Play: Wound care programs with audit-ready documentation and CMS-aligned workflows aren't just avoiding penalties. They're earning trust at the board level — becoming the service lines administrators point to when regulators show up, the programs payers approve without friction, and the departments that don't keep the compliance officer awake at night.

That confidence translates directly into stability. When budgets get tight and hospitals evaluate which service lines to preserve, compliance-clean programs survive. When administrators consider expansion, survey-ready programs get funded. A single condition-level deficiency can freeze capital access — making compliance readiness worth more than revenue alone.

SHS Insight: We help partners maintain continuous audit-ready posture aligned with Joint Commission and CMS interpretive guidelines, reducing the risk of becoming a compliance headline.

Q: Why are small hospitals falling behind in capital investment?

A: They're not falling behind — they're being forced to choose.

Moody's data from 2024 tells the story: The largest 50 hospitals increased capital spending 9% to an average of $498 million. The smallest 50 cut spending 16% to just $23 million — below depreciation levels, leaving facilities aging at a median of 15.1 years compared to 11.2 for large systems.

On the surface, this looks like a widening gap. Big hospitals pour cash into new towers and outpatient campuses. Small hospitals watch their plants age out while competing for the same patients.

But here's what Moody's analysts are rewarding in Q1 2026: capital agility, not capital volume.

The biggest hospitals can afford to wait a decade for new construction to break even. Smaller hospitals that deploy capital with surgical precision — renovating underutilized space into high-margin specialty centers instead of building what they can't afford — are earning credit upgrades despite lower absolute spending.

As Moody's lead analysts are framing it: success in 2026 isn't about the size of the expansion, it's about the speed of the cash flow.

The Brownfield Advantage: Wound care and HBOT centers are capital-efficient growth plays that fit this strategy perfectly. They launch fast, fit into existing clinical space, and generate positive ROI with improved EBITDA margins in under 12 months. No billion-dollar greenfield construction required. No 10-year payback period.

For smaller hospitals, this flips the investment gap into a competitive edge:

• 12-month ROI versus competitors waiting years for towers to generate revenue

• Modernized service mix without the debt load that downgrades credit ratings

• Days cash on hand improvement that Moody's tracks as a key upgrade metric

• Referral magnet that keeps high-value outpatient volume local instead of bleeding to regional competitors

The metric Moody's is watching isn't "how much did you spend" — it's "how strategically did you deploy limited capital to strengthen your balance sheet."

Small hospitals that answer that question with wound care and HBOT are demonstrating exactly the kind of capital agility that separates upgrades from downgrades in 2026.

SHS Insight: We help partners convert underutilized clinical space into high-margin wound care centers — maximizing existing footprints, improving operating cash flow, and launching durable programs without billion-dollar expansions.

Q: Are all hospitals under financial strain, or are some improving?

A: The sector isn't declining uniformly — it's diverging rapidly.

In 2025, Fitch and Moody's upgraded the outlooks of more than 20 health systems, including Boston Children's, Kettering Health, and Tampa General. These aren't marginal improvements. These systems are deleveraging — stabilizing operations, expanding high-margin service lines, and improving access through strategically placed outpatient sites.

The Divergence Data: Moody's capital spending analysis tells the story: The smallest 50 hospitals cut spending 16% in 2024 while the largest 50 grew 9%. That's not a temporary blip — it's a structural divide that compounds every year. Strong systems are pulling further ahead. Weak systems are falling further behind.

The credit rating agencies are rewarding specific behaviors in 2026:

• Outpatient revenue growth outpacing inpatient (12.8% vs 9.8% in 2025)

• Capital deployed for ROI, not just facility expansion

• Days cash on hand improvement through operational efficiency

• Payer contract strength and commercial mix optimization

These aren't abstract metrics. They're the difference between upgrade and downgrade. Between strategic expansion and managed decline.

The Positioning Reality: Wound care and HBOT fit both sides of this divide — but for completely different strategic reasons.

For upgraded systems, wound care is a growth play: capital-efficient outpatient expansion that captures high-margin volume, strengthens referral networks, and demonstrates the operational nimbleness Moody's is rewarding.

For smaller hospitals under pressure, wound care is a stabilization play: a revenue-resilient service line that modernizes aging facilities through brownfield renovation, generates 12-month ROI without debt-funded construction, and stops referral leakage. Every complex wound patient transferred to a regional competitor is lost lifetime value — revenue that funds upgrades instead of your own facility. Wound care keeps high-margin outpatient business local.

The financial reality determines the strategy. But the service line works in both scenarios.

SHS Insight: We help partners right-size program design to fit their financial reality — whether that's capital-efficient growth for strong systems or revenue-resilient stabilization for hospitals under pressure.

Q: How can hospitals protect wound care programs without cutting services?

A: Stop looking at the budget line labeled "wound care" and start looking at the budget lines that don't exist — the hidden operational drains that erode margins silently.

One of the most overlooked margin killers is provider operations: credentialing, licensing, and payer enrollment delays. These administrative bottlenecks cost more than $10,000 per provider, per month in deferred revenue and lost patient access. The damage never shows up on a budget variance report, which is exactly why it persists.

The Hidden Cost Cascade: When a new HBOT physician sits credentialed but not enrolled with payers for 90 days, that's $30,000+ in lost revenue before they see their first reimbursed patient. Patients who need treatment get referred to competitors instead of waiting. When a wound care specialist's license renewal stalls across state lines, referrals get redirected elsewhere. When payer enrollment paperwork sits in a queue for weeks, the program operates at partial capacity while administrators wonder why volume isn't growing.

None of this gets flagged as a "wound care problem." It looks like normal administrative friction. But it compounds into real margin erosion — the kind that makes CFOs start evaluating whether the service line is "worth it."

And here's what most hospitals miss: Moody's doesn't just review debt ratios during credit evaluations — they review revenue cycle efficiency. A wound care program with four-month credentialing lags signals operational sloppiness that can influence rating decisions.

The Strategic Fix: Hospitals that modernize and centralize these workflows unlock capacity without adding headcount. Faster credentialing means faster revenue. Streamlined enrollment means fuller schedules. Proper licensing coordination means physicians can actually practice instead of waiting on paperwork.

For wound care and HBOT programs serving high-acuity patients, this isn't administrative optimization — it's margin protection. Every month of enrollment delay is a month of treatments that don't get billed, patients who go elsewhere, and revenue that never materializes.

Before cutting services to balance budgets, fix the leaks that are draining revenue invisibly.

SHS Insight: We help partners streamline credentialing and enrollment so providers are revenue-ready faster — maintaining staffing stability, protecting patient access, and keeping revenue flowing without reducing care capacity.

Can specialized wound care reduce readmissions and inpatient days?

A: It's not about whether it can — it's about whether your hospital is capturing the data to prove it.

Advanced wound care programs that integrate early intervention, protocol-driven care, and interdisciplinary coordination demonstrably shorten hospital stays, reduce readmissions, and lower costs for complex wound patients. These aren't clinical abstractions. They're operational outcomes that show up in quality metrics, margin reports, and value-based contract performance.

The Operational Impact: Hospitals with structured wound care programs — daily physician rounds, certified wound care coordinators, interdisciplinary teams, and standardized protocols including robust turning programs, sepsis screening, and multi-treatment wound options — consistently outperform hospitals treating wounds reactively.

The difference shows up in metrics administrators already track:

• Reduced length of stay for pressure injury and diabetic foot infection admissions — and in a 2026 landscape where nursing shortages limit open beds, shorter LOS isn't just about cost, it's about capacity. Every wound patient discharged one day earlier is a bed opened for a high-margin surgical admission.

• Lower 30-day readmission rates for wound-related complications, protecting CMS Star Ratings and value-based payment bonuses

• Decreased inpatient costs through early intervention before complications escalate

• Improved sepsis prevention through systematic wound screening, supporting CMS Core Measure (SEP-1) performance

But here's what separates programs that get credit for these outcomes from programs that deliver results invisibly: documentation discipline and data capture.

If your wound care program is preventing readmissions but you're not tracking wound-specific metrics separately from general medical admissions, the CFO will never see the ROI. If you're shortening length of stay but quality officers don't know which interventions drove the improvement, the program won't get funded for expansion. If HCC coding isn't capturing wound acuity accurately, the hospital's Case Mix Index stays flat while care complexity rises.

The Best Practice Reality: You don't need a specialty hospital to deliver these outcomes. You need operational infrastructure: early evaluation protocols, interdisciplinary team coordination, certified wound care expertise, and the documentation systems that prove impact when budget decisions get made.

Hospitals that build this infrastructure position wound care as margin protection — a program that keeps high-cost patients stable, prevents expensive complications, generates quality metrics that unlock value-based payment bonuses, and opens bed capacity for high-margin admissions.

SHS Insight: We help partners integrate early evaluation, protocol-driven care, and multidisciplinary coordination into hospital-based wound care and HBOT programs — tracking outcomes that prove impact during budget reviews and value-based payer negotiations.

Q: Will new physician licensure pathways affect wound care and HBOT staffing?

A: They already are.

As of February 2026, 18 states — including Tennessee, Florida, Virginia, Arkansas, Idaho, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Minnesota, North Carolina, Nevada, Oklahoma, Oregon, Rhode Island, Texas, and Wisconsin — allow International Medical Graduates (IMGs) to obtain provisional licenses without completing a U.S. residency.

This isn't experimental anymore. It's operational policy targeting the projected physician shortage of 86,000 by 2036 — with specialist shortages (including complex surgical wound care) outpacing primary care shortages in some regions.

The Strategic Overlap: Here's why this matters specifically for wound care and HBOT programs: alternative licensure pathways target underserved and rural areas — the exact same geography where Baa-rated hospitals are struggling to recruit HBOT specialists and maintain wound care coverage.

Most state models require physicians to practice at a designated healthcare facility for 2-3 years before they can practice independently. That creates a captive, stable physician pool for hospital-based wound care programs — a major upgrade from the locum tenens revolving door that destabilizes continuity of care and burns through administrative resources.

The Compliance Reality: But there's a gap that hospitals can't ignore: these physicians may be world-class clinicians, but many lack experience with the U.S. regulatory documentation gauntlet — Medicare Local Coverage Determinations (LCDs), medical necessity justification for HBOT, audit-ready charting for cellular and tissue-based products, and the documentation precision that WISeR AI review systems are trained to scrutinize.

CMS and private payers are notoriously demanding about HBOT supervision documentation and wound care medical necessity. In the era of AI-driven audits (January 2026), "learning on the job" isn't an option. One month of improper HBOT supervision documentation from a new provider can trigger a multi-million dollar clawback that wipes out a year of program margins.

The Opportunity: Alternative licensure pathways widen the staffing pool — if hospitals build the clinical translation infrastructure to onboard international talent without compromising compliance.

Programs that treat this as a pure staffing play will struggle. Programs that treat it as a compliance + training investment will gain stable physician coverage in markets where competitors can't recruit at all.

SHS Insight: We equip partners with defensible documentation, program structures, and peer-level clinical guidance so wound care and HBOT teams can integrate new providers without compromising quality or compliance — ensuring new physicians are audit-ready from day one.

Q: What’s the next major workforce crisis?

A: It's not "next" — it's already here. And it's not where most hospitals are looking.

The nursing shortage everyone talks about is a symptom. The root cause is the nursing educator retirement cliff.

In 2024 alone, U.S. nursing schools turned away more than 80,000 qualified applicants — not because students lack interest, but because there aren't enough faculty to teach them. As of early 2026, 34.2% of nursing faculty are nearing retirement, and the salary gap makes recruitment nearly impossible. In many markets, nursing professors earn less than bedside nurses.

The Pipeline Collapse: This isn't a temporary bottleneck. It's a structural pipeline failure that compounds every year:

• Fewer nursing educators → fewer new nurses entering the workforce

• Fewer new nurses → higher competition for talent across all specialties

• Higher competition → greater strain on existing bedside staff

• Greater strain → burnout accelerates → experienced nurses leave for less demanding roles

For wound care and HBOT programs that depend on specialized nursing skills — NPWT management, CTP application, hyperbaric chamber operation, complex documentation — the educator shortage hits twice: once when recruiting becomes harder, and again when cross-training existing staff takes longer because there aren't enough experienced educators to accelerate the learning curve.

Generalist nurses aren't "plug-and-play" for a wound center. Without educators to teach CTP application or HBOT safety protocols, your "open" positions stay open indefinitely, bleeding revenue every day.

The Experimental Solutions: Health systems are trying to patch the problem:

• Split nurse-educator roles (Premier Health) — bedside nurses teaching part-time

• Standardized residencies (CommonSpirit) — structured onboarding to reduce training variability

• Tuition reimbursement tracks (Loma Linda) — incentivizing nurses to pursue advanced degrees

These help at the margins. But they don't solve the retirement cliff or the salary gap driving faculty shortages.

The Wound Care Reality: Programs that wait for the nursing pipeline to fix itself will be competing for shrinking talent pools with every other specialty in the hospital. Programs that invest in cross-training protocols and compliance-driven workflows now can keep teams functional even when recruiting slows.

The nursing educator crisis isn't coming. It's operational reality in 2026. The question is whether your wound care program is built to withstand it.

SHS Insight: We help partners stabilize wound care teams through cross-training and compliance-driven workflows that keep programs functional even when nursing pipelines lag.

What separates high- and low-performing hospitals — and where does wound care fit in?

A: It's not about size. It's about strategy execution.

In 2025, Moody's and Fitch upgraded 73 hospital systems while downgrading 75 — nearly breaking even for the first time in years. The agencies aren't rewarding the biggest budgets. They're rewarding operational agility: outpatient expansion, payer contract strength, technology deployment, expense management, and the ability to pivot resource allocation as conditions shift.

The Performance Gap: Top-performing hospitals aren't just weathering policy changes — they're positioning ahead of them:

• Expanding outpatient services before site-neutral cuts force the issue

• Strengthening commercial payer mix before Medicaid reductions hit

• Deploying capital for 12-month ROI instead of 10-year construction timelines

• Centralizing workflows to reduce administrative friction and improve margins

• Using data analytics to identify service line vulnerabilities before they become budget crises

Lower-performing hospitals are reacting instead of leading. They face capital shortages because they deployed resources inefficiently. They have staffing gaps because they didn't invest in retention. They operate stagnant service lines because they lack the data infrastructure to identify what's working and what's not.

The Operational Mirror: Here's what most hospitals miss: the same operational characteristics that separate upgraded systems from downgraded ones can be built into a wound care or HBOT program — even in hospitals under financial pressure.

Wound care programs structured with:

• Outpatient-first design (capturing the 12.8% growth vs 9.8% inpatient)

• Strong referral pipeline management (preventing leakage in consolidated physician environments)

• Technology-enabled workflows (AI-assisted documentation, compliance tracking, outcome measurement)

• Data-driven resource allocation (tracking LOS reduction, readmission prevention, bed capacity optimization)

• Expense discipline (centralized credentialing, standardized protocols, cross-training to reduce locum dependence)

• Improved operating margins (capturing high-margin commercial cases through referral management, reducing high-cost complications through readmission prevention)

...become high-performing service lines that demonstrate exactly the traits Moody's is rewarding at the system level.

For hospitals fighting to move from downgrade risk to upgrade territory, wound care isn't just a clinical program. It's a competitive differentiator — a service line that shows administrators, boards, and credit agencies that the organization can execute operationally even under pressure.

SHS Insight: We help partners structure wound care and HBOT as high-performing service lines — revenue-resilient, outpatient-friendly, technology-enabled — by centralizing workflows, strengthening referral pipelines, and applying data-driven management so wound care becomes part of the solution, not another strain on resources.

Q: Will the $50B rural health fund save struggling hospitals?

A: Not if they're waiting to be saved.

The Rural Health Transformation Fund — passed as part of the One Big Beautiful Bill Act in July 2025 — allocates $50 billion over five years ($10B annually, FY2026-2030) distributed across all 50 states. Every state received funding in December 2025, averaging $200 million in Year 1.

But here's what most hospitals missed in the celebration: the National Rural Health Association CEO made it explicit — this fund is "NOT designed to offset Medicaid cuts." It's for transformation and innovation, not preservation of current operations.

The Funding Reality:

• 50% distributed equally across states

• 50% based on rural population, facility counts, and hospital financial health

• $12 billion tied to "Make America Healthy Again" policies (nutrition education, Presidential Fitness Test, SNAP restrictions)

• States can claw back funds if MAHA policies aren't implemented

• Hospital direct payments capped at 15% of funds, infrastructure at 20%

The money is real. But it flows to programs that demonstrate transformation, not programs requesting bridge funding to maintain current service lines.

The Strategic Window: Hospitals that frame wound care and HBOT as community transformation tools — reducing chronic disease burdens, cutting avoidable transfers, keeping rural patients local — can compete for dollars that peers requesting "operational support" will never see.

A single prevented diabetic amputation isn't just good medicine in 2026 — it's a $50,000+ preservation of the state's Medicaid pool, making your program the poster child for "transformation" funding.

The fund priorities align almost perfectly with what advanced wound care already delivers:

• Chronic disease management (diabetic foot ulcers, venous insufficiency, pressure injuries)

• Interdisciplinary care coordination (physicians, nurses, case managers, nutrition specialists addressing social determinants of health)

• Community impact measurement (local wound care prevents transfers to regional centers)

• Innovation adoption (AI-assisted documentation, telehealth wound monitoring, outcome tracking)

But administrators won't make that connection unless wound care leaders position programs using transformation language, not clinical language.

The Competitive Reality: The $50 billion sounds massive. Spread across 50 states over 5 years, with hospital direct payments capped at 15%, and innovation requirements attached, it's not rescue funding. It's strategic investment capital available to programs that can demonstrate how they transform community health outcomes, not just deliver care.

Hospitals that wait for the fund to "save" them will be disappointed. Hospitals that position existing service lines as transformation engines will compete successfully.

SHS Insight: We help rural partners position wound care and HBOT as transformation-ready service lines that align with fund priorities — building programs around chronic disease management, interdisciplinary care, and community impact so hospitals can compete for dollars that might otherwise bypass them.

Q: What's the single most important step wound care programs should take in 2026?

A: Act while you still have positioning power.

The policy landscape, reimbursement rules, and compliance environment all shifted in the past six months. Some hospitals used Q4 2025 and Q1 2026 to strengthen documentation systems, build compliance readiness, and position programs as essential infrastructure. Others waited to see what federal policy would announce.

The hospitals that moved early are already ahead. They're navigating WISeR prior authorization without operational chaos. They're capturing the 2026 "Gold Card" exemption through 90%+ approval rates. They're earning Moody's upgrades by demonstrating capital agility. They're stopping referral leakage before physician consolidation locks them out of EHR-driven pathways.

The hospitals that waited are reacting instead of leading.

The window to prepare before the next wave of changes isn't closed — but it's narrowing. The Rural Health Transformation Fund is allocating $10 billion annually through 2030, but only to programs that demonstrate innovation and transformation, not preservation. Medicaid cuts accelerate in 2027 — and in the credit world, 2026 is the "Year of Preparation" because 2027 is the "Year of Reckoning" for systems that didn't diversify their payer mix. Site-neutral payment expansion continues. AI-driven audit scrutiny intensifies.

Programs that use 2026 to build audit-ready documentation, board-level trust, and strategic positioning will walk into 2027 prepared. Programs that keep waiting for clarity will find themselves scrambling to catch up.

SHS Insight: We help partners build wound care programs that are stable enough to weather policy changes and positioned strategically enough to seize funding opportunities and competitive advantages.

Final Word: The Hospitals That Will Define Healthcare's Next Decade

The healthcare landscape changed fundamentally in the past six months. Policy shifted. Payment models restructured. Compliance environments tightened. Consolidation accelerated. And through all of it, a clear line emerged between hospitals that positioned ahead of change and hospitals that reacted to it.

The hospitals earning Moody's upgrades in 2026 aren't the ones with the biggest budgets. They're the ones with the sharpest execution. Capital deployed strategically. Outpatient services launched before site-neutral cuts forced the issue. Compliance infrastructure built before WISeR went live. Referral pipelines strengthened before EHR systems locked physicians into network-only pathways.

These hospitals didn't wait for federal policy to tell them what to do. They read the landscape, identified the opportunities, and moved.

Wound care and HBOT programs can be built the same way. Revenue-resilient service lines that capture outpatient growth. Compliance-ready operations that earn board-level trust. Capital-efficient programs that generate 12-month ROI without debt-funded construction. Community transformation engines that compete for Rural Health Transformation Fund dollars while others wait for rescue.

The difference between programs that thrive in 2027 and programs that struggle isn't resources. It's positioning. It's whether your wound care program is structured as essential infrastructure administrators fight to preserve — or just another clinical department vulnerable when budgets get tight.

2026 is the Year of Preparation. 2027 is the Year of Reckoning.

The hospitals that act now — building audit-ready documentation, strengthening referral management, demonstrating operational outcomes, positioning for transformation funding — will walk into the Medicaid cuts, payment pressures, and workforce challenges already prepared.

In 2026, audit-ready is a choice. In 2027, it will be a requirement for survival as AI-driven reviews become the industry standard.

The hospitals that keep waiting for clarity will find themselves scrambling to catch up.

There is no policy change too disruptive to navigate. No compliance requirement too demanding to meet. No workforce challenge too difficult to withstand. No competitive pressure too intense to overcome. For programs built on operational discipline, strategic positioning, and documented outcomes, the future isn't threatening — it's full of opportunity.

The question is whether your wound care program is built to seize it.

That's where Shared Health Services comes in. For 30 years, we've equipped wound care and HBOT programs with the operational infrastructure, compliance frameworks, and strategic guidance to thrive when others struggle. We've seen policy waves, payment shifts, and competitive pressures reshape the industry again and again. And every time, the programs we partner with don't just survive — they strengthen.

In 2026, that experience matters more than ever.

The landscape is set. The challenges are clear. The opportunities are real. And the hospitals that move now will define what comes next.

📞 Ready to build your wound care strategy?

Call (800) 474-0202 or email sales@sharedhealthservices.com.