The future of healthcare isn’t an abstract conversation.
It is already showing up in the decisions health systems are making today. Every conversation we have with leaders touches the future. AI. The continuing evolution of site neutral payments. Consumer expectations. Workforce gaps. Aging populations. New competitors. Rapidly evolving sites of care.
At the same time, leaders are dealing with very real challenges right now. How can our hospitals remain financially sustainable under growing policy pressure, including Medicaid eligibility and financing changes and proposals to expand site-neutral payments in Medicare? Can we operate like a true system? Where should we grow? What should we stop doing? How do we continue delivering exceptional care while the economics and consumer expectations (and the world around us) keep changing?
This leads us to the bigger question our team has been asking: what will a health system need to look like 25 years from now? To understand the magnitude of the change ahead, look back at the last 25 years – a comparatively favorable period in which the economy grew, the population expanded and aged, and technology advanced in important ways without fundamentally rewriting how healthcare worked.
Think back to healthcare in 2000. Paper medical records were still the norm. Most X-rays had not been digitized. Many hospitals prohibited cell phones because of concerns that they might interfere with medical equipment. In the last quarter century, hospitals experimented with value-based care, labor demand fundamentally changed, care moved out of the hospital, and technology was adopted in transformative ways. Consider…
Hospital capacity contracted sharply, and rural access to care receded. The number of community-hospital beds fell from 2.9 per 1,000 residents in 2000 to 2.28 in 2024, a decline of approximately 21%, according to data from the Kaiser Family Foundation.
Care increasingly moved out of the hospital and into the community. Procedures that once required inpatient stays are now increasingly offered in outpatient and community settings. This migration has already changed where care is delivered, who captures demand, and how payment flows. For instance, the Centers for Medicare & Medicaid Services (CMS) has proposed phasing out its list of procedures that must be performed in the inpatient setting for Medicare beneficiaries by 2028.
Healthcare has become an even larger part of the economic fabric of the communities they serve, emerging as the dominant jobs engine. Healthcare employment grew two thirds from 2000 to 2025, overtaking manufacturing and retail trade in 2009 to become the largest U.S. industry by employment. At the local level, this means that hospitals employ an increasing share of the same individuals and families who have relied on their care for generations, adding another layer of connection to the communities they serve.
In other words, health system leaders have already navigated enormous change. That matters because the next 25 years will require more. The history should give leaders confidence, but not comfort. The next 25 years will require higher-stakes decisions, bolder investment choices, and a clearer break from legacy assumptions.
Deeper fiscal pressure, demographic strain, and generationally transformative technologies will reshape what we can cure, what we can prevent, how we treat, and the experiences of our patients, caregivers, and communities. The question is not whether the model will change; it is whether today’s leaders will move early enough to shape it.
What could healthcare look like in 2050?
We don’t pretend to know exactly how the future will unfold. But several forces are already moving fast enough that leaders should be asking what they could mean for their organizations.
Prediction
Data Insight
What Will It Mean?
End-of-life care will expand and continue moving out of the hospital, putting palliative, hospice, and home-based serious-illness care at the center of strategy.
In 2006, 36.4% of U.S. deaths occurred in an inpatient hospital and 25.2% occurred at home. As early as 2016, those positions had reversed: 30.5% occurred at home versus 29.4% in an inpatient hospital. Recent national data continues to show more deaths at home than in hospitals. Medicare hospice expenditures grew ninefold from $3.6 billion in FY 2001 to $30.3 billion in FY 2025.
Growth in serious illnesses will become increasingly decoupled from inpatient growth. Health systems will have to win in the home, support caregivers, and compete across a broader aging-services ecosystem—not just capture hospital episodes.
Personalized health guidance will become the norm, with increasing access to AI agents, biomarker-guided therapies, wearables, and consumer platforms.
Physicians will no longer serve as the primary gateway to health advice and treatment decisions. Health systems that do not provide trusted, AI-enabled navigation will risk losing the informational front door, referrals, and network fidelity to life sciences companies and consumer platforms.
As fiscal pressure intensifies, margin will depend less on payment architecture and more on operating capability.
Health systems will need to deliver care in the lowest-cost appropriate setting, reduce avoidable utilization, manage financial risk, and sustain essential capabilities within a prospectively constrained revenue base. Payment will increasingly follow clinical need, site-of-care discipline, and total-cost performance.
AI and new clinical technologies will reshape healthcare delivery far beyond today’s initial use cases.
In 2024, 71% of hospitals reported using predictive AI integrated with their EHR, a significant increase from 66% in 2023. Predictive AI was most commonly used to predict health trajectories or risks for inpatients, while the fastest growing uses were to simplify billing and facilitate scheduling.
Future healthcare leaders—who will be algorithm natives and digitally fluent—will expect technology-native workflows, not incremental automation. Leading-edge organizations will rapidly adopt emerging technologies to redesign the work itself—from patient care, access, scheduling, diagnosis, care and medication management, documentation, revenue cycle, workforce planning, and patient engagement.
Vehicle safety technologies and autonomous driving will materially reduce motor-vehicle trauma—and systems will need to reposition how they deliver care accordingly.
Trauma demand will shift rather than disappear. Fewer high-energy collisions will be offset by more geriatric falls and fragility injuries. In some markets, high-acuity trauma capability could consolidate into fewer regional hubs while systems expand geriatric trauma, fall prevention, teletrauma, and transfer coordination.
None of these changes will occur independently. They will collide with one another. Looking back 25 years reminds us that the world changes quickly, and we have to be prepared to embrace, adopt, and challenge opportunities we only imagined as science fiction.
The definition of an exceptional health(care) experience will become much more varied. The older adult managing several chronic conditions does not need or want the same experience as an AI-native consumer. The hospital will remain essential, particularly for the most acute and complex care, but it will no longer be the organizing center of every healthcare ecosystem.
What should health system leaders do today?
Many leaders we work with already feel the ground shifting. Years of delayed or softened policy changes—for instance, the repeated postponement in reductions in Medicaid’s Disproportionate Share Hospital allotments and CMS extensions of telehealth flexibilities and hospital at home programs—have conditioned some organizations to wait rather than act. But this approach, while attractive, is shortsighted. We believe the risk is not overreacting; it is waiting too long to redesign care delivery, capital deployment, workforce strategy, partnerships, technology adoption, and consumer access for the world that is arriving.
The patient experience will become more distinct, diverse, and disrupted—and the one-size-fits-all model will fail. An older adult managing multiple chronic conditions, a daughter coordinating care for a parent, a rural resident relying on remote specialty support, a family making decisions under a high-deductible health plan, and a digitally native consumer beginning with an AI agent will each enter the system differently. Future delivery models must support multiple consumer and community journeys, or risk becoming irrelevant to the populations they serve.
To transform their organizations for the future, health systems need a sharper point of view on whom they serve, where they can win, which capabilities are essential, and what they must stop doing. What are you truly great at? Hospitals and health systems have proven time and again that they are resilient. That alone will not prepare us for change – relevance, agility, and financial sustainability will not come solely from incremental improvement.
There is no single health system of the future
There will not be one winning model. Organizations must make hard and different choices based on their communities, capabilities, economics, and aspirations. Some will become highly integrated regional systems. Others may become orchestrators of networks and partnerships or differentiate around complex care. Still others may build much stronger capabilities in the home, digitally, or across ambulatory settings. Those that avoid hard choices will drift; those that make them intentionally and proactively will define a more durable role in their markets.
This creates a practical and urgent strategic challenge: how to serve broad community needs while also designing distinct models for populations with very different access, payment, acuity, technology, and support requirements.
Upcoming articles in this space will explore future health system archetypes in detail, how systems may evolve and what capabilities leaders will need to build now to remain relevant 25 years from today.
Closing thoughts: why and how should our mission last?
We don’t have all the answers, and there will be no universal playbook.
But waiting for certainty is not a strategy. The work of defining what your organization must become by 2050 needs to start now, while leaders still have room to shape the future rather than react to it.
Two questions are a good place to begin.
Why should our mission last to 2050 and beyond?
How will we change now to make that mission durable?
The future health system is going to be built by the decisions leaders make long before 2050 arrives. Let’s do it together.
Dan Clarin, Rebecca Duffin, Callie Eberspeaker, Camila Luciano, and Mayra Sharma contributed to this article.
The author would also like to thank the entire Health System of the Future team for informing the development and insights of this important work: Brian Ball, Matthew Bates, Nick Bidwell, Joyjit Choudhury, Scott Christensen, Lauren Gorski, Therese Fitzpatrick, Christen Hunt, Kenny O’Neill, Jacob Pritikin, Adnan Qureshi, Matt Robbins, and Max Timm.
Author
Amanda Steele
Managing Director, Practice Co-Leader, Strategy & Business Transformation
Amanda Steele is a Managing Director and co-leads Kaufman Hall’s Strategy & Business Transformation practice, where she focuses her time advising health systems and provider enterprises with their enterprise strategy – developing value propositions to deliver on their missions and visions in light of the fast-changing healthcare landscape. Ms. Steele assists clients with a broad range of governance, operating model...
