Hospital and health system leaders are mapping out strategies for long-term growth and sustainability as average hospital margins continue to improve month over month in 2023.
While the median year-to-date operating margin index for hospitals improved to 1.4 percent in June, most hospitals underperformed for the month and the gap between high-performing hospitals and financially struggling ones may be widening, according to Kaufman Hall.
Health system executives pinpointed various areas — including expanding ambulatory sites, telehealth and home care, bolstering high-acuity service lines and investing in value-based care — as keys to improving hospital finances and capitalizing on emerging healthcare trends for the future.
"We view health system growth in the same way that the S&P 500 companies have demonstrated consistent growth over the decades: Growing in the right places with the right services," said Peter Banko, President and CEO of Centennial, Colo.-based Centura Health, which will fold into Chicago-based CommonSpirit Health over the next year.
Mr. Banko will continue to serve as president of CommonSpirit's Colorado/Kansas/Utah Division and his leadership team will oversee the 20 hospitals now managed by CommonSpirit in Colorado, Kansas and Utah. CommonSpirit recently acquired five hospitals in Salt Lake City and is expanding its acute presence in Denver and Colorado Springs, Colo.
"We also see this 'where-to-win' growth over the next three years in physician partnerships, core service lines (especially cancer, cardiac, neuro and ortho care) and the ambulatory network in the growth markets of Colorado, Kansas and Utah," Mr. Banko told Becker's. "We have also found ourselves extremely active in the [mergers, acquisitions and partnerships] space, unlike anything I have seen in three decades. These explorations involve physician groups, health systems, payers and adjacent healthcare players who view growth and opportunity in the same ways that we do."
Sanford Health President and CEO Bill Gassen sees virtual care as a key growth opportunity, with the Sioux Falls, S.D.-based system investing $350 million to transform how it will deliver care.
"Patients will save on time, travel and expense," Mr. Gassen told Becker's. "By providing the most advanced technology close to home, patients will be able to immediately access care, monitor their health and connect with a trusted provider from home or a nearby satellite clinic. We also plan to open a new innovation center, which will allow our researchers to reach more patients and offer easier access to clinical trials."
Sanford is also investing in data analytics, automation and artificial intelligence to support its workforce, reduce costs and help improve patient outcomes, Mr. Gassen said.
David Callender, MD, president and CEO of Houston-based Memorial Hermann Health System, highlighted the importance of simultaneously growing the health system's footprint with its services and partnering with organizations that fuel its journey to value-based care.
"We are increasing beds and capacity for hospitals in high-growth areas and expanding our high-performing physician network by creating innovative alignment opportunities," Dr. Calendar said. "We are also intentionally pursuing partnerships to help enhance timely, personalized and high-quality care with the ultimate goal of improving the health of our region. Two of these recent partnerships — with GoHealth and AccentCare — are helping to increase access to care by creating more entry points for timely, high-quality service."
Kenneth Rose, president and CEO of Texas Health Hospital Mansfield, echoed Dr. Callender's comments, adding that creating processes and value for patients — especially with digital strategies — will be critical for the future.
Mr. Rose also highlighted outpatient and primary care as a key growth opportunity, particularly with the growing population of young people in North Texas. "The healthcare world is moving so quickly out of the hospital that we will need to focus more on providing care for our patients closer to or actually in their homes," he said.