A split is emerging in how health systems are approaching growth. Some of the country’s largest health systems are shedding hospitals, while others are litigating and spending billions to add them.
Together, the moves point to the same discipline taking hold across the industry. Health system leaders are sharpening priorities around which markets they want to own, and acting on that imperative by either buying, selling or litigating.
Lisa Zuckerman, senior vice president of treasury and strategic investing at Chicago-based CommonSpirit Health, framed the question directly.
“The process is really around us looking at market position, market potential,” she said. “Is a market better served by us? Or do we think that another organization would provide the community with a better future?”
So far in 2026, CommonSpirit has moved fast on these questions: The system has signed a definitive agreement to transfer Steubenville, Ohio-based Trinity Health System to Pittsburgh-based UPMC and has sold a critical access hospital in Devils Lake, N.D., to Grand Forks-based Altru, with three more North Dakota hospitals in process of being sold.
For its part, Renton, Wash.-based Providence sold Queen of the Valley Medical Center in Napa, Calif., to NorthBay Health and is considering selling its insurance arm. Meanwhile, Franklin, Tenn.-based Community Health Systems plans to divest nine hospitals across four states this year for more than $1.2 billion, having already sold roughly 35% of its hospital portfolio in recent years to pay down debt and refocus on what CEO Kevin Hammons has called the system’s “core markets.”
Tax status and deal structures aside, nonprofits and for-profits are running the same play: portfolio rationalization, executed under different names. Houston Methodist CEO Marc Boom, MD, distilling this strategy, said his system “does not try to be the biggest — it strives to be the best.” Timothy Pehrson, CEO of Oklahoma City-based Integris Health, called it “smart growth,” and said, “The discipline is what to say ‘no’ to.”
In Buncombe County, N.C., four systems are answering Ms. Zuckerman’s question with a “yes” — and two are litigating to prove it. After the North Carolina Department of Health and Human Services identified a need for 129 acute care beds in the Buncombe, Graham, Madison and Yancey service area, regulators awarded 95 beds to Asheville, N.C.-based Mission Health and 34 beds to a new hospital for Winston-Salem, N.C.-based Novant Health. Altamonte Springs, Fla.-based AdventHealth and Chapel Hill, N.C.-based UNC Health both filed appeals April 24, asking an administrative law judge to reverse those approvals and award the beds to themselves.
Similar certificate-of-need competitions are playing out elsewhere. In Virginia, Marriottsville, Md.-based Bon Secours filed notices of appeal April 10 contesting state approvals of two competing hospital projects in Chesterfield County — a 66-bed VCU Health hospital and a 60-bed HCA Healthcare hospital. In Tennessee, HCA is facing opposition from Vitruvian Health over a proposed freestanding emergency department in Bradley County.
In North Carolina, the same calculation is producing a different answer. Charlotte, N.C.-based Atrium Health announced May 1 a $2 billion proposed combination with Raleigh-based WakeMed Health & Hospitals — a deal WakeMed President and CEO Donald Gintzig said took two years to coordinate. He noted WakeMed is significantly smaller than Duke Health and UNC Health, which each operate in the competitive North Carolina market.
Read together, these deals are not opposite strategies. Health system leaders are asking Ms. Zuckerman’s central question — is the market better served by us, or by someone else? — and acting on the answer with the tools they have. While some large systems have the scale and the established core markets to define what does not fit and what to let go, others see fast-growing markets as worth the regulatory and legal hassle to enter or defend.
The deals look different on the surface — appeals, $2 billion combinations, divestiture announcements — but the underlying decision is the same one leaders are making, market by market: hold, sell or expand. The trend suggests scale on its own is no longer the strategy. The decision in front of every system is which markets to hold, which to compete for and which to walk away from.
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