As health systems pursue growth in new markets, leaders say a consistent set of financial, demographic and strategic criteria guide decisions on where — and whether — to expand.
At least 18 large systems have announced or plan to close mergers, acquisitions or partnerships in 2026. Others are preparing to build hospitals or ambulatory locations in new areas. Despite this momentum, health system presidents and CEOs told Becker’s they rely on key data points to evaluate potential markets.
Peter Slavin, MD, president and CEO of Los Angeles-based Cedars-Sinai Health System, said the organization begins by evaluating population growth and where utilization is likely to increase over time.
“Through this process, we look at a segmented view of our market share in each region and by service line, carefully reviewing the availability of community-based services and other local context factors that inform decisions,” Dr. Slavin said.
For Akron, Ohio-based Summa Health, expansion strategy depends on whether the organization is prioritizing contiguous growth or economies of scale, acting President and CEO Daryl Tol said.
A contiguous growth strategy focuses on expanding into adjacent markets by combining submarket growth trends with localized data, such as payer mix and clinical supply versus demand. In contrast, an economies-of-scale approach emphasizes nonadjacent expansion, prioritizing regional economic dynamics, competitive opportunities and the regulatory environment.
“While both strategies offer distinct pathways to expansion, the ultimate factor is often a restrictive regulatory landscape or an unsustainable payer mix, as even the most promising growth potential cannot offset a market that is structurally or financially inaccessible,” Mr. Tol said.
Leaders at Mullica Hill, N.J.-based Inspira Health similarly evaluate a mix of community need, competition, projected demand and financial sustainability when considering expansion, President and COO Warren Moore said.
The system assesses whether there is a quantifiable need for its services, whether entering a market aligns with its mission and whether existing providers are already meeting demand.
“What is the projected growth in demand over the next five to 20 years? Can the population base support the type and level of service we want to provide?” Mr. Moore said. “Will expansion into the new market be financially sustainable? On our own? In partnership with another organization?”
For some systems, partnerships are a key avenue for expansion.
Chicago-based Northwestern Medicine has pursued collaborations with organizations including Naples (Fla.) Comprehensive Health, the London Clinic and Clearwater, Fla.-based BayCare Health System. These efforts reflect a strategy to extend its mission beyond its traditional markets, according to President and CEO Howard Chrisman, MD.
At Northwestern Medicine, alignment with like-minded partners committed to expanding access to world-class, compassionate care is paramount, Dr. Chrisman said.
“With BayCare, for example, we are expanding access to advanced care and research while strengthening physician education and development,” he said. “Sustainable growth comes from clinical, cultural and strategic alignment with collaborators equally committed to quality, scale, community impact and a ‘Patients First’ mission.”
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