When David Huffstutler became president and CEO of Austin, Texas-based St. David’s HealthCare in February 2011, the system had about 60 sites of care, six hospitals and a couple of freestanding emergency departments.
Today, St. David’s has about 200 sites of care, including nine hospitals with two more in development, 13 freestanding emergency departments, 39 urgent care clinics and 11 ambulatory surgery centers. The system, which operates as a partnership between Nashville, Tenn.-based HCA Healthcare and local nonprofit foundations, has also maintained a debt-free position, according to Mr. Huffstutler.
“The system is positioned well. We have about 44% share in the market now. We have a strong, geographically distributed network and nationally recognized quality,” Mr. Huffstutler told Becker’s.
Mr. Huffstutler is set to retire in March 2027 after 16 years leading the system, and HCA is conducting a national search for his successor.
The transition comes at a difficult time for hospital CEOs, who are weighing growth plans against policy changes, financial pressure, workforce strain and fast-moving technology. About 43% of U.S. hospitals are operating at a loss, according to Kaufman Hall, and HR 1 is projected to cut nearly $1 trillion from Medicaid over 10 years, with many of its eligibility changes rolling out in late 2026 and 2027.
Against that backdrop, Mr. Huffstutler said St. David’s has continued to expand by planning ahead, evaluating investments against demand and finding ways to control costs beyond traditional staffing reductions.
“Given what’s happened with policy decisions at both the federal and state level over the past few years, the revenue stream is challenged more than it has been in a long time,” he said. “We saw some of this coming a couple of years ago and planned for it. We have a lot of tools in the tool belt to help us become more efficient and find ways to save, other than the more traditional employee and labor reductions. So, we’ve generally been able to maintain our margins despite seeing some revenue deterioration.”
He credited HCA’s experience across 43 markets with helping St. David’s evaluate investments and determine which care delivery models make financial sense.
“The result is that we can dial the knobs as well as anybody in determining whether an investment makes sense, whether the demand is there and whether adequate revenue can be generated,” Mr. Huffstutler said.
That approach has shaped how St. David’s expands across Central Texas, where population growth is driving demand for care but does not necessarily warrant building hospitals or other high-cost facilities in every community. The system uses a methodology to decide where lower-acuity sites make sense on the fast-growing edges of its market, then moves up to freestanding emergency departments and hospitals as population and demand grow.
“Doing that in the face of these revenue challenges, primarily these policy changes, is becoming more difficult,” he said. “It makes us dial the knobs even more accurately around what we develop, when we develop it and where we develop it, and I think we get better and better at that.”
Alongside those investment decisions, Mr. Huffstutler said St. David’s is looking for staffing efficiencies by ensuring employees spend more time performing work that matches their training and skills.
“It’s not so much reducing staffing as ensuring our staff work at the top of their license, so we have the right skill mix and higher-trained employees are doing what they’re trained to do, and their time isn’t consumed by lower-level activities that could be done by somebody else,” he said.
Technology is another part of that effort. St. David’s is using AI in clinical and administrative work, which Mr. Huffstutler said it is already freeing caregivers to spend more time with patients. He also cautioned that efforts to improve efficiency must be balanced with maintaining clinical quality, which he views as closely tied to an organization’s culture.
“We have to create a culture and a level of expectation where we attract and retain staff who are committed to our mission, committed to that culture and committed to taking care of patients, even when resources aren’t ideal,” he said. “That takes a lot of time to develop.”
That emphasis on culture also informs his view of what hospital CEOs will need in the years ahead, particularly as financial pressures and technological changes place greater demands on employees.
“The technology is great and the AI is great, but at the end of the day, we’re in the healthcare business. We’re caring for patients. It’s a people business, and we need a lot of staff to do that. They’ll be the key,” he said.
Beyond supporting their workforces, Mr. Huffstutler said CEOs will need to prepare their organizations to adapt to ongoing change while strengthening financial and operational discipline, particularly as some lost revenue may not return in the near term.
“I do think the organization is positioned well to do even bigger and better things in the future, despite the challenges we’ll face,” Mr. Huffstutler said. “We’ll figure it out. We have a lot of smart people in this industry, and I’m very optimistic about it.”
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