One enterprise, different roles

Health systems are being squeezed from both directions.

In acute care, Vizient data show that average direct cost-per-inpatient day increased 13% from 2023 to 2025, while inpatient days grew 6%. Access remains difficult. Only 22% of new endocrinology patients and 28% of new cardiology patients were seen within 10 days. And inpatient demand is projected to grow another 10% over the next decade, even as average general acute care occupancy already sits at 84%.

But addressing those pressures won’t be as simple as adding more hospital space or layering ambulatory growth onto a hospital-centric operating model. Vizient projects ambulatory volumes will grow 21% from 2026 to 2036 compared with 12% growth in hospital volumes. Hospitals remain essential for complex, high-acuity care and margin, while the ambulatory enterprise is absorbing more demand and extending access into communities.

Care delivery is becoming interconnected faster than the operating model that manages it. For example, recruiting a surgeon affects clinic space and procedural capacity. Moving a service can free hospital capacity but change the economics elsewhere. Yet many health systems still allocate capital, measure performance, and assign accountability through individual facilities and business units.

The next phase of acute-ambulatory strategy requires making harder choices: Where should care be delivered? Which services should grow, consolidate, or move? And when resources are constrained, what creates the greatest value for the enterprise?

A recent Vizient Networks virtual meeting with health system leader Jeremy Fotheringham of SSM Health reinforced four strategies for ensuring acute and ambulatory care work as one system.

1. Stop making the hospital the default

In 2026, ambulatory settings already account for the majority of volume across every major service line in the Vizient analysis ranging from 53% of general surgery to 91% of spine volume.

Yet legacy business models remain heavily hospital-centric, influencing where organizations put capital, recruit physicians, and build capacity even when demand suggests a different answer.

The response shouldn’t be an indiscriminate push to move care out of the hospital. “Ambulatory” itself encompasses very different settings, from ASCs to physician offices, home, and virtual care. And the appropriate mix varies considerably by service line, procedure, and disease stage.

Some services benefit from consolidation, others need broad geographic distribution, and some require a hub-and-spoke model that connects hospitals, ambulatory sites, and communities. Depending on the service, that may mean linking local access to highly specialized hospital care, consolidating high acuity ambulatory services, creating a hospital-to hospital referral network, or some combination of approaches.

Instead of starting with the site, start with the care. What level of acuity is involved? Where can quality be sustained or improved? Where is capacity available? What does the patient need before and after the encounter? Where can the service operate sustainably?

The hospital remains one possible answer, but it shouldn’t automatically be the answer.

2. Make the trade-offs explicit

It’s easy to align around growth when every unit gets to grow. Enterprise strategy gets harder when one hospital needs to give up a service, an ambulatory investment takes precedence over a hospital request, or physician recruitment benefits one part of the network more than another.

With capital, workforce, and capacity constrained, health systems can’t afford to do everything everywhere. Breaking that pattern requires shared decisions around interdependent resources. Physician recruitment should connect to clinic space and procedural capacity, service-line growth should connect to workforce and capital planning, and acute and ambulatory investments should compete within the same strategic framework rather than predetermined pools.

It’s important that governance gives leaders both the authority and expectation to make choices for the whole, including choices they might not make if they were optimizing their own facility.

If every site has to win every decision they encounter, the enterprise has very few real choices.

3. Give each part of the system a distinct job

Alignment doesn’t require acute and ambulatory care to look alike or produce the same results. That expectation can distort strategy.

Hospitals are built to handle complex, high-acuity care, and resource-intensive procedures. They also continue to generate much of the margin needed to maintain expensive infrastructure. Ambulatory care creates value differently by extending access, establishing relationships with more patients, and creating lower-cost pathways for care that may prevent costly avoidable admissions.

Leaders need to define what each part of the system is expected to contribute before deciding how to measure it. A physician practice or clinic may produce modest standalone margin while strengthening network integrity, relieving hospital capacity, or creating access to downstream specialty services.

For the ambulatory enterprise, performance might include reach, access, network integrity, and appropriate movement of care into lower-cost settings. For hospitals, it might emphasize complex care, quality, capacity stewardship, and financial contribution.

Different parts of the system can create distinct kinds of value. What matters is whether those contributions add up to stronger enterprise performance.

4. Change the math

Traditional measures such as revenue per square foot remain useful, but enterprise value demands a wider lens: quality, access, market growth, network integrity, financial contribution, and avoided costs. An ambulatory investment that reduces potentially avoidable hospital utilization may create substantial value even when that benefit never appears on the site's financial statement. This is a more complete accounting of the return.

When capital is scarce, the next-dollar decision should account for what an investment does collectively to capacity, quality, access, downstream utilization, margin, and avoided cost. Otherwise, health systems risk funding the assets with the easiest ROI to calculate rather than the ones most important to their future.

Optimize the system, not every site

Health systems need to prioritize system performance over site-level optimization. Decisions about growth, capital, and program distribution must be made from an enterprise perspective even when they create local disruption. Acute and ambulatory care will never contribute in identical ways because they serve fundamentally different roles. The goal is not to make them equal. It is to ensure both contribute intentionally to the health of the enterprise.

Some services will consolidate or move, and capital will flow differently. An ambulatory investment may look weaker on its own P&L while creating substantial value elsewhere, and a hospital leader may need to support a decision that reduces local volume because it strengthens the broader system.

Health systems have spent decades measuring and managing individual parts of the organization, but care delivery no longer respects those boundaries.

The fundamental shift is from optimizing individual sites to optimizing them as interconnected parts of the system. Every site needs a role and the enterprise needs a strategy that connects them.

Learn more about Vizient Networks with 12 C-level networks—including ambulatory, strategy, and operating leaders—that drive healthcare performance improvement to help hospital and healthcare leadership teams accelerate their high-performance journeys.