Hospitals and health systems are facing a challenging paradox. They are expected to deliver higher-quality care, meet increasingly complex Centers for Medicare & Medicaid Services (CMS) performance measures and serve growing patient needs, while also operating against persistent financial strain. Rising labor costs, denials, reimbursement delays and the growing operational burden of managing payments all continue to squeeze liquidity. In fact, recent industry analyses show U.S. hospitals’ days cash on hand averages only six months.
Financial sustainability is not just a balance sheet metric — it can be a crucial determinant of care quality. "When hospitals and health systems have reliable working capital, they are better able to reinvest in the resources, staffing, technology and community programs needed to improve patient outcomes,” says Lauren Hewings, Senior Director, Working Capital Vertical Development, Visa Commercial Healthcare Solutions. Investing in these areas can help strengthen quality performance. Improved CMS quality scores can then help these organizations achieve higher reimbursement rates, driving revenue growth.
Hospitals and health systems that develop strong financial positions can adopt a more strategic, forward-looking approach, directing capital toward investments that can strengthen competitiveness in an increasingly volatile market.
Hospitals and health systems can leverage digital payments in a number of ways to help optimize working capital. Moving more spend onto commercial cards can help streamline payment workflows and improve payment timing management — resulting in increased control of and visibility into cashflow, while also providing easy access to readily available working capital. Hospitals and health systems looking to accelerate receivables and mitigate losses from late payments should consider accepting commercial card payments for payer reimbursements. In Visa ’s Working Capital Index, 61% of healthcare organizations cited card acceptance as a DSO reduction strategy.¹
Working capital as a catalyst for strong outcomes
Strong cash flow and predictable liquidity can allow hospitals to operate smoothly and strategically. With a clear line of sight into incoming payments, health systems can:
- Maintain adequate staffing levels and invest in competitive salaries
- Purchase critical equipment and supplies without deferral
- Fund staff training and quality-improvement programs
- Expand preventive care and patient engagement efforts
- Target resources toward underserved communities
These investments can directly influence CMS quality measures, from readmissions and patient experience to safety events and timely care. When hospitals have to delay or eliminate these investments due to cash constraints, quality scores may suffer.
Visa’s Working Capital Index shows that surveyed healthcare organizations that leverage external sources of working capital are reinvesting the benefits of using these solutions into the areas most connected with quality and operational advancement. These include faster payments to suppliers, care innovation and building stronger cash reserves. This financial agility can improve the ability for hospitals and health systems to better navigate market volatility and plan for the future.
The hidden impact of reimbursement delays
For many hospitals and health systems, liquidity challenges can shift from occasional issues to an ongoing structural reality. Delays in reimbursements, especially from Medicare and Medicaid, can disrupt operational continuity. Rising denials or delays require repeated back-and-forth with payers, consuming staff time and driving up administrative cost.
Beyond the cost of managing payments, outdated processes and lack of clear payments data can slow down a hospital’s ability to understand what funds are available to deploy. One health system described dedicating a 20-person team solely to reconciling 835s with incoming checks and manually matching over $1 million in payments every month, even after deploying an automated solution. These reconciliation delays can ripple outward into patient care, resulting in deferred equipment orders, staffing gaps and fewer resources for readmission-reduction programs.
Ultimately, working capital is about more than cash on hand — it is about time and operational agility. When payments are slow to arrive, some hospitals may choose to postpone the very quality initiatives that help drive better care.
Accelerating reimbursement to strengthen care quality
Innovations including digital payments (e.g., virtual cards), workflow automation and DSO reduction strategies through commercial card acceptance have emerged as critical tools to accelerate cash flow. These solutions can help stabilize day-to-day volatility and give hospitals greater control over the timing of incoming funds — something traditional reimbursement channels may often lack. Virtual cards, in particular, provide a faster and more predictable source of working capital compared to traditional payment methods like paper check — while also reducing reconciliation friction and fraud risk.
By speeding payment delivery, enabling predictable timing of funds and reducing manual reconciliation work, digital payment tools can positively impact a provider’s cash flow, and in turn, their ability to reinvest in better care. They also can create operational efficiencies that reduce administrative spending, freeing up additional resources for clinical use.
Improving payments efficiencies can have a real impact across the healthcare ecosystem. According to J.P. Morgan’s 15th annual “Trends in Healthcare Payments” report, 50% of consumers will switch providers over a poor payment experience. For adults under 35, that number jumps to 72%.² This reinforces the connection between financial operations, patient trust and overall satisfaction—another area reflected in CMS scoring.
Financial transparency builds confidence and performance
Strong financial visibility doesn’t benefit hospitals alone; it can also help strengthen relationships across the healthcare ecosystem. Transparent, reliable financial operations can help build trust with payers, suppliers, donors and community partners. They also create accountability and increase confidence internally as leadership teams can make clearer decisions when they understand exactly where cash is flowing and when.
Strategic partnerships built on financial and operational transparency can expand access to resources, reduce friction and accelerate progress toward health-equity goals. These are increasingly important elements of CMS programs and community-health mandates.
Looking ahead: Liquidity as a strategic advantage
The next era of care delivery will reward health systems that design their organizational infrastructure for both financial and operational agility. According to Visa’s Working Capital Index, U.S. healthcare organizations can gain a competitive edge by:
- Using on-demand working-capital solutions to respond quickly to changing needs
- Leveraging AI to improve cash-flow predictability
- Reinvesting financial gains into supplier relationships and care innovation
When hospitals can access funds quickly, understand their cash position clearly and automate the administrative burden tied to reimbursement, they can redirect energy toward what matters most: delivering high-quality care.
Financial stability is a foundational driver of patient outcomes, CMS performance and long-term sustainability. As the industry continues to face volatility, the ability to accelerate reimbursement and unlock working capital may become one of the most important levers for improving care quality across the U.S. healthcare system.
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- Visa and PYMNTS Intelligence, 2025. “Visa’s Growth Corporates Working Capital Index 2025–2026”. https://workingcapitalindex.visa.com/en. Visa’s Growth Corporates Working Capital Index 2025–2026 was commissioned by Visa Inc. and conducted in collaboration with PYMNTS Intelligence, based on a global survey of 1,457 CFOs and Treasurers from companies with annual revenues between $50 million and $1 billion across 23 countries and 10 industry segments, fielded May 23 – July 18, 2025.
- J.P. Morgan, 2025. “Trends in Healthcare Payments report reveals patient collections are primary revenue concern for providers”. Research based on quantitative data and qualitative data. Quantitative payments data was derived from the InstaMed Network (a J.P. Morgan solution); the data was processed between 2019 and 2024. Qualitative data derived from three online surveys commissioned by InstaMed and conducted by Qualtrics, LLC, in 2024. https://www.jpmorgan.com/payments/newsroom/healthcare-payments-trends-report-2025
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Visa 2025–2026 Growth Corporates Working Capital Index Methodology
The Visa 2025–2026 Growth Corporates Working Capital Index was commissioned by Visa Inc. and conducted in partnership with PYMNTS Intelligence to benchmark how mid-sized companies optimize working capital to drive growth and resilience. The study surveyed 1,457 CFOs and Treasurers from companies with annual revenues between $50 million and $1 billion (“Growth Corporates”) across 23 countries and five global regions: North America, Europe, Asia-Pacific (APAC), Latin America and the Caribbean (LAC), and Central Europe, Middle East and Africa (CEMEA). Respondents represented 10 industry segments, including Agriculture, Commercial Travel, Healthcare, Manufacturing & Construction, Media & Technology, Retail & Marketplaces, Facility Management, Fleet & Mobility, and Professional Services. Data was collected via a double-blind survey fielded May 23–July 18, 2025.