Issue link: https://beckershealthcare.uberflip.com/i/1544291
20 EXECUTIVE BRIEFING 1 EXECUTIVE BRIEFING Healthcare organizations have been operating in survival mode. Protecting thin margins, managing workforce strain, and absorbing continuous disruption. These near-term pressures have been unavoidable and consuming. Yet even as daily demands capture leadership attention, critical questions are emerging: Are existing care models, footprints, and capabilities suited for what lies ahead? What will the workforce model need to look like? And how should organizations select collaborators and partners for a future that is destined to be dramatically different? The forces reshaping healthcare are already at work, challenging leaders to look beyond immediate constraints and confront how their organizations must evolve to remain viable and effective over the next decade. The four forces PwC identifi es four forces pressing transformation of the US health industry: persistent and growing economic pressure, technological innovation, transformative medical advances, and consequential, shifting consumer behavior. According to Alena Taylor, lead provider strategy partner at PwC, navigating economic pressures and technological innovation are the most signifi cant priorities for providers. According to PwC's analysis, the median operating margin of the nation's 20 largest health systems was just 1.5% in 2024, placing many systems in survival mode. "Economic uncertainty is real for providers — especially for academic medical centers and rural health systems," Ms. Taylor said. "To get ahead of these pressures and ensure a sustainable health system for decades to come, organizations must consider structural shifts in portfolio focus, cost structure and operating model design." One strategy for dealing with economic pressures is thoughtful adoption of technology, including AI. But, in contemplating future technology investments, providers need to strike a balance between continued investment in their core infrastructure and investments in new tools and systems. Rather than simply jumping on the AI bandwagon, leaders should develop a strategic approach for investing in technology that generates measurable improvements in clinical quality, labor productivity, and fi nancial performance. The four questions The future of healthcare will be defi ned by integrated, data-driven environments that enable providers to deliver consistently high- quality, coordinated care to patients. To deliver on this vision, provider leaders should fundamentally rethink and answer four questions: - What care is being delivered? - Where is it delivered? - How is it delivered? - Who delivers it? What care is being delivered? Health systems should assess the clinical services their community needs and strategically decide which service lines to offer in a particular market or at a specifi c facility. According to Ms. Taylor, organizations attempting to be all things to all people often fail because they dilute their value, ultimately resonating with no one. As technology has provided consumers with more options this same principle increasingly applies to hospitals. "It's ineffective for most organizations to be offering 'everything to everyone' in each of their hospitals," Ms. Taylor said. "Each campus should have a clearly defi ned clinical identity aligned to community demand and sustainable volume thresholds required to maintain high quality standards. In many cases, that may mean fi nding alternate ways to provide fragmented, sub-scale services in the community, a step many organizations have been hesitant to take in the past." Thriving in the future doesn't mean just stopping some services; it also means redeploying capital and clinical talent into differentiated, strategically advantaged service lines. Where is care being delivered? In concert with deciding what service lines to provide, leaders should also determine the right care setting for each service. To avoid being constrained by a health system's existing physical footprint and infrastructure, Ms. Taylor recommends engaging in "ground zero" thinking, in which teams envision the optimal sites of care, unconstrained by legacy infrastructure. Key factors to consider include demand, acuity, access, convenience, and cost. She explained that as more low-acuity services shift to ambulatory surgery centers (ASCs), micro-hospitals, virtual care and hospital- at-home programs, health systems will need signifi cantly less traditional inpatient capacity in certain markets. If avoidable admissions continue to decline and lower-acuity volume keeps moving outward, some systems could require substantially less inpatient footprint, potentially as much as half of what exists today. As a result, remaining hospital facilities would increasingly concentrate on high-acuity care, including critical care and complex surgical services. How is care being delivered? Historically, health systems have underutilized formal process engineering disciplines. Health systems should embrace care engineering to streamline processes, reduce variability, prevent excess utilization, and improve outcomes. Reengineering care delivery starts with using data to empower clinical teams to make faster, more informed decisions. This requires a robust, modern digital foundation. A full cloud-based data platform allows teams to unify fi nancial and operational data at every level. With a single source of truth, health systems can deploy centralized operational command capabilities and AI-supported decision tools that accelerate throughput, improve capacity management and strengthen revenue cycle performance. Building the health system of 2035: The keys to future provider success