HealthEdge’s latest survey reveals how payers are confronting rising costs and regulatory pressures by modernizing legacy technology systems and adopting service-based operating models and AI.
As health care organizations chart their course into 2026, the health care payer landscape faces mounting complexity and pressure. The latest HealthEdge® survey of more than 550 health plan leaders offers a revealing snapshot: Today’s most urgent needs are managing escalating costs, navigating evolving regulatory requirements, and confronting legacy data systems that hinder innovation and value-based care (VBC) expansion.
The cost of health care continues to rise faster than both inflation and wage growth, creating challenging conditions for the entire industry. Health plan leaders must manage cost containment, adapt to rapid regulatory change, and meet increasing demands from both members and providers. In response, payers are adopting modern, connected, and scalable technology and services designed to support collaboration and real-time data sharing. AI is quickly becoming a primary tool to control rising costs and address compliance requirements, driving strategic investments in technology modernization, interoperability, and automation.
Cost pressures and regulatory complexity
Survey data confirms that rising costs and compliance demands continue to dominate payer priorities. This year, 52% of health plan leaders named managing costs as their principal challenge. Yet business growth and competitive pressure have surged from previous years as another top concern. Notably, 85% of executives report that mandates such as the One Big Beautiful Bill Act (OBBBA) are placing moderate to significant strain on both costs and margins. As regulatory pressures intensify, organizations must not only respond to shifting compliance standards but also invest in modernizing technology and services for sustained performance.
Compounding these pressures, regulatory changes increasingly dictate operations ranging from network adequacy to real-time eligibility, requiring seamless sharing of clinical and administrative data. Health plans face the dual challenge of maintaining compliance and maintaining member engagement, as penalties and operational risks rise for those with inadequate systems.
Breaking through siloed legacy systems
Another formidable barrier is the persistence of siloed data architectures and outdated core systems. For more than 30% of health plans, integrating provider data across platforms is cited as the leading obstacle to effective VBC and provider collaboration. Disparate systems impede the flow of actionable information, delay claims, raise administrative overhead, and limit the ability to deliver coordinated, member-focused care.
This fragmentation hinders productivity not just internally, but also in payer-provider partnerships, where reliable data exchange is critical for payment accuracy, care coordination, and performance measurement under value-based contracts. Modernizing these foundational systems is essential to unlocking agility and scalability.
Managing today’s challenges for success in 2026
To address the downstream impacts of a strained health care ecosystem, payers are fast-tracking investments in technology modernization and exploring new service models. While AI and automation continue to gain traction—with 34% of organizations prioritizing automation using advanced analytics, and more than half (51%) deploying AI for processes such as prior authorization, there is also movement toward connected infrastructure and services. More than a quarter of survey respondents cite modernization or consolidation of core administrative systems as the top strategy for reducing costs, while alternative service models are gaining momentum to further operationalize compliance and drive efficiency.
Implementing integrated platforms allows for harmonization of claims, billing, care management, and VBC workflows. This not only streamlines administrative burdens but also supports compliance and enables faster adaptation to market and regulatory shifts. Importantly, modern core systems are increasingly viewed as a prerequisite for deploying advanced engagement tools and analytics, not just for AI, but for all technology-driven strategies that demand unified, high-quality data.
Strategic engagement and the way forward
Although member engagement remains a focus, survey results show that true differentiation will require more than consumer-facing digital applications. Health plans recognize that satisfaction, retention, and growth are dependent on the strength of their back-end technology backbone and their ability to adapt using outcome-driven innovation.
Ultimately, the organizations poised to succeed will be those that integrate cost control, regulatory readiness, data modernization, and operational flexibility into their strategic agenda. As regulatory volatility and competitive pressure persist, investments in next-generation infrastructure and delivery models will define operational resilience—and pave the way for providing measurable value to partners, providers, and members alike.For a deeper dive into these findings, download the full report: The Great Rebalancing: Inside the New Realities Shaping Health Plan Performance.
Note: This content was created by HealthEdge.