Health systems approaching capital decisions in 2026 face a familiar set of pressures, including patient volumes and consumer expectations rising while Medicaid funding is contracting and the cost of construction keeps climbing.
Gary Paxson, president and CEO of Morganton, N.C.-based UNC Health Blue Ridge, and Greg Baxter, MD, CEO of Manchester, N.H.-based Elliot Health System, described their financial frameworks during a panel at Becker’s CEO + CFO Roundtable in November. Both are navigating the same macro pressures of reimbursement compression, Medicaid uncertainty, and an accelerating shift toward ambulatory care, and both are starting by optimizing their current teams and resources.
For Dr. Baxter, that orientation came directly from his board.
“When I was asked to serve as CEO, I was challenged by my board that we should pursue operational excellence as a strategy,” he said. “Step one, everyone in the organization should ask themselves every single day, if you’re in a leadership position even more so, ‘Am I deploying resources the best way I know how today’ — today, meaning it’s temporal. I might make a different decision tomorrow or a week from now, but can I say to the people I support, this is the best way I would use those resources?”
That philosophy is behind Elliot Health’s growth from $500 million to $1.2 billion in revenue over six to seven years, through the pandemic.
Mr. Paxson is working from a different starting position. UNC Health Blue Ridge is projecting a $40 million gap over the next five years based on anticipated Medicaid reductions in North Carolina, a figure that has shaped how he thinks about every allocation decision.
“It’s a balance of operational improvements and strategy,” Mr. Paxson said. “What are the areas where we’re losing market share? We could put new service lines in. Just constantly looking at it, but we know it’s coming. We’ve got to figure out how to balance the scales.”
North Carolina’s state health plan recently designated UNC Health as a preferred providers in a favorable contract for now, but the situation could change quickly. The health system is preparing for additional patient volume and a shift in the type of patients who will be seeking care.
Rather than adding capacity, UNC Health Blue Ridge rebuilt its clinic workflows from the template level up, examining what every employee from front desk to MA to patient care coordinator was actually doing and whether they were working at the highest and best use of their skills. The physician conversation was deliberately framed around patient need, not throughput.
“We didn’t come into this and say, ‘Docs, we need you to see four more patients a day,’” Mr. Paxson said. “We have all these patients who cannot get in and they’re wanting our help, so let’s make it about that.”
As a result, primary care new patient wait times dropped from 36 days to 24, with a target of 15. Specialty care fell from 38 to 28 days and two specialty clinics cut their new patient wait times by 71% and 69%, respectively. WRVUs increased 3.3% on average.
“We saw patient experience go up by 1.3 percentage points and we were already very high,” Mr. Paxson said. “So just collectively it was win, win across the board.”
At Elliot Health, the operational-over-capital logic extended to a capital decision the system ultimately chose not to make. With two newly opened facilities already at capacity, an ED and multiple urgent cares, the question on the table was whether to add more freestanding sites.
“Do you want to add another freestanding ED in our city?” Dr. Baxter said. “I don’t think that’s the right thing to do, societally speaking, as far as cost of care. However, if we can’t provide an alternative, we’ll have to think about those types of things.”
The alternative was a virtual ER program that now handles a couple hundred patients a month. Patients waiting in Elliot’s urgent care or ED, or calling from their cars or offices, can connect with an emergency medicine physician in roughly five minutes. About 75% to 80% have their visit resolved through an asynchronous lab test or imaging order, without ever entering a facility. The program is now being evaluated for expansion statewide.
The service-line investment strategy at Elliot follows the same strategy. Rather than building toward comprehensiveness within its roughly 300-bed hospital, Dr. Baxter said the system has invested in specialist service lines it can now export to communities across the southern part of the state, generating a sustainable volume base at home while supplying services that smaller systems can no longer staff.
“We were able to invest in a specialist program, build that service line with the idea that we can span that and service another community with the things that they need,” Dr. Baxter said. “What we want to make sure we can do is have more people choose us for all their levels of care.”
That growth, however, faces structural headwinds that neither operational discipline nor smart service-line investment can fully absorb. For Dr. Baxter, 340B reimbursement and site-neutral billing represent the system’s largest unresolved financial risks.
“Some of the bigger challenges — the tectonic plates — 340B, site-neutral billing, those are challenges which are going to take some seismic impacts on us,” he said.
Both leaders said they will track whether the gains hold through a consistent set of ambulatory metrics: new patient wait times, referral volume, panel sizes, scheduling availability and provider patient-facing hours.
“Is it all working?” Mr. Paxson said. “Are we creating a two-edged sword or is it a win-win where the efficiencies are taking hold and making momentum and we’re seeing positive experience?”
Becker’s 3rd Annual Fall Chief Pharmacy Officer Summit is the top tier event that the people leading the future of pharmacy convene. This 3-day event is built specifically for Chief Pharmacy Officers and senior pharmacy leaders. The sessions examine the workforce, financial and clinical priorities shaping pharmacy today. Becker’s is where candid discussions flourish and new ideas thrive. Becker's 3rd Annual Fall Chief Pharmacy Officer Summit
