Health systems across the country are restructuring their operating models to navigate an increasingly challenging healthcare landscape. Rising financial pressures, workforce shortages, inflation and shifting patient demands are pushing health systems to rethink how they operate, allocate resources and deliver care.
Large health systems including CommonSpirit and Providence recently implemented significant changes to their operating models, with Ascension in the middle of a similar transformation.
Renton, Wash.-based Providence, a 51-hospital system, recently revamped its operating model to include a leaner executive team and a new divisional structure.
Providence recently consolidated its operating regions into three divisions — North, Central and South — resulting in three divisional teams rather than seven regional senior leadership teams. The health system also consolidated the leadership of its physician enterprise, ambulatory care network and clinical institutes lines of business under one executive leadership team.
Chicago-based CommonSpirit implemented a similar change last year. The 137-hospital system consolidated its operating model from eight regions to five: California, Central, South, Mountain and Northwest.
CommonSpirit also sold two Dignity Health hospitals in San Francisco to UCSF Health in August and plans to sell Devils Lake Hospital in Devils Lake, N.D., to Altru Health System. The transactions follow CommonSpirits acquisition of five Utah hospitals as well as Centennial, Colo.-based Centura Health folding into CommonSpirit.
St. Louis-based Ascension is undergoing a similar reorganization, which the system said will strengthen its leadership structure and business strategy.
The 118-hospital system has made several changes to bolster its operational leadership at the market and national level for better hospital operations and a more sustainable future. The changes include the addition of three regional operating leaders that are each aligned to a subset of its markets or horizontal business strategies.
Part of Ascension's restructuring has included the sale of several key assets and hospitals across multiple markets.
Recent transactions include the sale of Birmingham-based Ascension St. Vincent's Health System to the University of Alabama System, the sale of Via Christi Hospital in Pittsburg, Kan., to St. Louis-based Mercy, the sale of Our Lady of Lourdes Memorial Hospital System in Binghamton, N.Y., to Sayre, Pa.-based the Guthrie Clinic, and the sale of three hospitals to Midland-based MyMichigan Health.
Ascension also cemented a joint-venture partnership with Detroit-based Henry Ford Health this year and plans to sell nine Illinois hospitals to Ontario, Calif.-based Prime Healthcare in the first quarter of 2025, pending regulatory approvals and closing conditions.
Several other health systems have made similar changes to their operating models this year, including Indiana University Health, Springfield, Mass.-based Baystate Health, Valhalla, N.Y.-based Westchester Medical Center Health Network and Cleveland-based University Hospitals.
While the specific changes vary by organization, a shared vision is evident: health systems are moving toward leaner, more agile operating models that prioritize efficiency, align leadership with strategic goals, and address financial and workforce challenges.