Health system executives are upending the traditional definition of growth. Expansion now goes far beyond the simply higher patient volumes, more care sites and increased market share.
Melinda Hancock, executive vice president and CFO of Sentara Health, said health system growth is now shaped by the financial realities bearing down on the industry and rapidly advancing technology to expand capacity resources.
“Growth becomes not only for top side revenue, but for capabilities and new ways of delivering care, as well as an efficient administration to support them,” she said during an interview with “Becker’s Healthcare Podcast.” “The overhead of today has to be very different tomorrow and we are ensuring we invest in the technology to enable that. We’re also looking for scale for the investments we are making in technology now.”
That reframing is not philosophical. It is a direct response to a seven-year financial forecast that looks similar at health systems across the country, one defined by rising labor and supply costs, pharmaceutical expenses, interest rates, site-neutrality payment changes, Medicaid redetermination losses, and the expiration of ACA tax credits that have left more consumers unable to afford exchange coverage. The margin structure that has historically allowed hospitals to cross-subsidize underfunded lines of business is under sustained pressure, and Ms. Hancock is clear-eyed about what that means.
“The majority of our patients are financed by a minority of our patients,” she said. “If you start to pull on the very threads of the areas that are providing margins to the hospital that enable them to care for their community and invest in technology and their workforce, then the entire fabric starts to weaken to support the whole. That is what we’re seeing.”
Sentara’s answer to this pressure runs through its structure. The system is approximately 50-50 care delivery and health plan — 12 hospitals, more than 400 sites of care across Virginia and northeastern North Carolina, and a health plan serving 1 million members across Medicare, Medicaid, and commercial lines. That integration is, in theory, a significant economic advantage: the same organization that collects the premium also delivers the care, creating alignment of incentives that purely fee-for-service systems cannot replicate. The challenge Ms. Hancock has spent years working on is turning that theoretical advantage into an operational one.
The work is harder than it sounds. Healthcare delivery and health plan operations are structurally different businesses.
“Care delivery is very labor dependent. Health plans are more technology dependent,” Ms. Hancock said. “Our ability to make sure we are talking the same language and we’re trying to solve the problem is so important.”
Leaders who grew up on one side often lack the financial fluency to make good decisions that affect the other. Sentara has invested heavily in building that cross-functional literacy — recorded tutorials, shared leadership forums and a “turnaround room” stood up in 2025 to address health plan losses from Medicaid redeterminations and where care delivery leaders sit alongside health plan leaders to identify and solve problems jointly.
The economics of that integration show up in specific ways. When data from the turnaround room revealed members being discharged from the hospital without a primary care physician, the team engaged the Sentara medical group to close the gap — a move with both clinical and financial consequences, since unmanaged patients without PCPs generate worse outcomes and higher downstream costs.
Another success story from the turnaround room focused on diabetic patients. The team realized some diabetic patients were missing critical eye exams because they weren’t able to secure transportation to the hospital. The health plan developed a mobile exam unit that goes to members’ homes, reducing the risk of costly complications. These are not amenity investments. They are cost-of-care interventions made possible because Sentara sits on both sides of the equation.
On the growth side, Ms. Hancock’s framework starts with efficiency rather than expansion.
“Any growth needs to make sure we’re optimizing the assets we have,” she said.
The investments the industry is making in technology — AI-enabled workflows, machine learning, digital platforms — demand scale to justify their cost, and Ms. Hancock sees the imperative to scale as one of the defining strategic questions for health systems right now. Where Sentara can build capabilities internally, it will. Where it cannot, the organization engages strong and aligned partners.
The revenue cycle redesign Sentara is undertaking reflects both the efficiency and the consumer dimensions of growth. Revenue cycle is the last financial touchpoint a patient has with the system and, often, a source of significant stress. Redesigning it around a “touchless” model leveraging technology to meet patients where they already transact in their daily lives, reduces administrative cost while improving the consumer experience.
“This goes back to our purpose of meeting our community and our individuals where they are on their journey, clinically and administratively,” she said. “That’s been a key focus for us this year and hopefully we’ll have great success to share in the future as we actively redesign our work.”
Access expansion, similarly, is both a community obligation and a growth strategy. Sentara has opened Sentara Cares clinics in areas of highest documented need and deployed a mammography van to reach members who would otherwise go unscreened. Doubling residency slots — from roughly 267 residents to a target that requires partnerships with outside institutions — is an investment in the future supply of the workforce the system will need to sustain that growth.
What ties it together is a conviction that the old growth playbook — add beds, add sites, add volume — cannot carry a health system through the financial environment ahead.
“Our leadership must be equipped and knowledgeable about the financial opportunities before them in order to reshape how we provide our services to consumers,” she said. “That work will continue. It’s hard but very valuable work.”
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