Health systems are entering 2026 with a sharper focus on strategic, measured growth — a response to ongoing economic uncertainty, federal policy shifts and the rise of artificial intelligence — according to a Dec. 18 report from Kaufman Hall.
This year, health system leaders worked to balance growth, performance improvement and transformation, with many shifting away from growth for its own sake toward more deliberate planning. “Intentional and proactive” was the phrase used by Kaufman Hall to describe the mindset in many executive suites and boardrooms.
Despite an unpredictable start to the year, including policy ambiguity tied to the One Big Beautiful Bill and the effect of tariffs, health systems, particularly those under $5 billion in revenue, began refining their enterprise strategies. These midsized organizations, many of which serve stable or shrinking populations, have taken the lead in laying groundwork for long-term success, according to the report.
Outpatient expansion was a key area of investment in 2025, as health systems accelerated the shift away from inpatient care. Organizations focused on scaling outpatient services and optimizing core service lines such as oncology, cardiovascular care and women’s health, with eyes on expanding digestive and behavioral health in 2026.
The report also pointed to increased interest in defining what “transformation” really means for hospitals and health systems. With care models, regulatory requirements and technology — especially AI — evolving rapidly, Kaufman Hall predicts 2026 will be a year for leaders to clarify both their goals and methods for remaining competitive.
That transformation may include narrowing service lines, redefining operating models and identifying revenue streams that go beyond performance gains and incremental growth.
“Simply put, transformation is fundamental to every health system’s future — and how they operate, grow, and serve their patients,” Kaufman Hall analysts wrote. “We predict 2026 will be a year for leaders to consider the breadth of transformation needed ahead — and determine both what they do and how they do it.”
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