On the surface, 2024 could seem like a positive year for U.S. provider organizations — median 12-month rolling average hospital operating margins reached +4% through Q3 2024, up from -1% through Q3 2022. Yet beneath the surface, provider organizations continue to face a range of challenges that will persist over the long-term — workforce challenges, continued cost inflation, reimbursement pressure, competition (alternate sites of care, larger medical groups, etc.), rapid innovation and changing patient expectations, to name a few (see Figure 1). 

Figure 1: Example long-term pressures faced by US provider organizations

Given these pressures and the financial performance improvement seen in 2024, we were not surprised to see respondents to our annual health system executive survey report a very consistent set of organizational priorities centered around workforce, efficiency and resilience, and revenue cycle management (see Figure 2).

Figure 2: US Health system and hospital executive strategic priorities

Beyond these consistent priorities, this year’s survey confirmed that leading/scaled systems are pursuing a wide range of strategic initiatives, including the following (listed examples are indicative and not reflective of a system’s entire strategy):

  • Pursuing local market density and share (Hospital Corporation of America, Memorial Hermann)
  • Expanding to geographies well beyond the core footprint (Advocate, Orlando Health)
  • Emphasizing alternate sites of care (Tenet, Sutter, Corewell)
  • Monetizing internal capabilities, including technology, services, research (Mayo Clinic)
  • Focusing on the transition to care financing/value-based care (Banner)

Based on our experience, we believe no single silver bullet strategy exists — health systems, their capabilities and their market footprints are unique (see Figure 3). Provider organizations that are most successful within this changing landscape will:

  • Possess a deep level of organizational self-awareness  
  • Partner strategically to increase impact, access capabilities and focus internal efforts
  • Look beyond the conventional provider landscape for partners and opportunities (i.e., participate actively in “swim lane hopping”) 
Figure 3: US Health system partnership priorities

More detailed results from our 2024 Health System Executive survey are available at the link below. We would welcome the opportunity to discuss these results, strategies and potential implications for your organization in more detail (our contact information is embedded).

Download our analysis for further insight.

For more information, please contact us.

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