The movement of healthcare outside the hospital isn’t new. Payers have pushed care toward lower-cost settings for decades, and health systems have been building ambulatory networks for just as long.
What has changed is the strategic importance of what surrounds the hospital.
You can own 20 clinics and still not have a health system. You can employ 200 physicians and still not have an aligned medical staff. If your ambulatory strategy is essentially a map covered with dots showing where you own clinics, you probably don’t have an ambulatory strategy.
The better question is: What clinical capabilities does this community need, and how do we build a delivery system around those needs?
That starts with access. Where are the geographic gaps? What care are patients leaving the community to receive? Which specialties are missing or undersupplied? Where should care migrate from the hospital to a more appropriate setting? Where should we own, partner or affiliate?
In regional and rural markets, those questions become particularly important. An unfilled specialty position isn’t simply a recruiting problem. It can mean patients traveling significant distances for care, weakened clinical programs, and eventually an established pattern of seeking care somewhere else.
That matters to the community. It also matters competitively.
A hospital standing largely on its own is vulnerable. Competitors can recruit physicians, establish new access points and build relationships with patients long before those patients ever need a hospital. A well-designed delivery system creates something much harder to displace: an interconnected set of physicians, services and access points that patients trust and physicians want to be part of.
But strategy only becomes meaningful when it changes how the system functions.
Physician recruitment has to follow clinical and market needs rather than simply filling openings. Primary care capacity has to support access and continuity. Scheduling, technology and clinical processes have to connect practices rather than leave them functioning as independent offices under a common logo.
Hospital service lines have to support the capabilities being built throughout the system. And capital allocation has to consider the strength of the entire delivery system—not just the hospital campus.
I saw this firsthand while leading strategy and operations at a rural hospital in California. We expanded our physician network and built a much broader ambulatory presence that included new diagnostic, surgical and specialty care capabilities. The objective wasn’t to accumulate locations. We were building a delivery system that expanded access, added services the community needed, and put care in settings that made sense for patients and the market. During that period, our primary service area market share grew from 56% to 72%.
There is an important irony in all of this. A strong ambulatory strategy may sometimes move care away from the hospital. That can look threatening if the objective is protecting an asset. It makes considerably more sense if the objective is building a system.
A hospital surrounded by a weak delivery system is ultimately a vulnerable hospital.
The goal isn’t to protect the hospital from change. It is to build the physicians, access, services and relationships around it that allow the entire system, and the community it serves, to thrive as healthcare continues to change.