Health systems across the U.S. are under unprecedented margin pressure. In response, many organizations are pursuing volume growth — particularly in service lines and payer segments with positive total margins. Most strategies emphasize marketing, branding and outreach. Yet one of the most powerful drivers of sustainable growth is often overlooked: operational excellence.
Volume growth is not merely a demand problem. It is fundamentally a capacity problem. Health systems that cannot reliably access, treat and transition patients efficiently will struggle to grow — no matter how strong their market presence. Our system recognized that meaningful growth required addressing three operational imperatives: expanding access, reducing length of stay and preventing avoidable medical admissions.
The first imperative was improving access. Too often, unused clinic slots, fragmented scheduling practices and unpredictable no‑show rates silently erode capacity. We standardized physician scheduling templates, created full transparency for centralized scheduling and introduced disciplined overbooking to offset predictable missed appointments. This shift transformed scheduling from a local, variable process into a systemwide operational capability. The result was a dramatic improvement in slot utilization, completed visits, and provider productivity — effectively unlocking latent capacity without adding new infrastructure.
The second imperative focused on hospital throughput. Length of stay is not simply a clinical metric — it is a strategic growth lever. Every unnecessary inpatient day constrains surgical capacity, increases emergency department boarding and limits the organization’s ability to serve higher‑acuity needs. We implemented standardized interdisciplinary huddles, daily discharge planning, and structured multidisciplinary rounds supported by consistent training and accountability. By reducing variation and elevating execution discipline, we created a shared operational rhythm that accelerated safe discharges and freed capacity across the system.
The third imperative addressed avoidable medical admissions. A significant portion of inpatient utilization stems from gaps in ambulatory care — fragmented chronic disease management, delayed access and insufficient care coordination. We strengthened primary and specialty collaboration, expanded same‑day access, and deployed emergency department pathways that safely transition patients home with telehealth and home-based support. These interventions did more than reduce admissions; they allowed us to convert medical capacity into surgical capacity, directly enabling higher‑value procedural growth.
Importantly, these efforts aligned with value‑based care incentives. Preventing avoidable utilization improved outcomes while strengthening performance in accountable care arrangements. Operational excellence thus became a bridge between financial sustainability and better patient care — not a trade-off between the two.
The cumulative impact of these initiatives was transformative. Increased access drove ambulatory growth. Improved throughput unlocked inpatient capacity. Total operating revenue was $7.3 billion in the 12 months ending Dec. 31, 2025, up from $6.4 billion during the same period last year. Net patient service revenue was $6.5 billion, up from $5.9 billion last year. Operating income was $191.8 million (2.6% operating margin) in 2025, up from an operating loss of $172.6 million (-2.7% margin) in 2024. Most importantly, the organization learned that disciplined operational management — supported by transparency, accountability and standardization — is a growth engine, not merely a cost‑control exercise.
Health system leaders often search for growth externally: new markets, acquisitions or expanded marketing spend. Yet the most immediate opportunity may already exist inside their walls. When access is maximized, throughput is reliable and avoidable utilization is reduced, organizations create capacity to grow without adding beds, buildings or burnout.
Operational excellence is not about squeezing more out of clinicians. It is about designing systems that allow clinicians to work at the top of their licenses while ensuring patients receive timely, coordinated care. Growth follows naturally when operational discipline removes friction from the patient journey.
In a margin-constrained environment, health systems cannot afford to treat operations as secondary to strategy. Operations are strategy. But operational tools alone are not sufficient. Sustainable growth requires a true model of transformation: one that sees every staff member as worthy and capable, actively inspires them to contribute, and ensures their voices are heard. When people are elevated in this way, disciplined management and accountability become engines of learning and performance rather than compliance exercises. Organizations that combine operational excellence with a human-centered transformation model will not only unlock capacity — they will build resilient systems capable of continuous growth, better care and enduring impact.
Cliff Megerian, MD, FACS, Chief Executive Officer, University Hospitals (Cleveland)
Peter Pronovost, MD, PhD, Chief Quality & Clinical Transformation Officer, University Hospitals
Paul Hinchey, MD, MBA, Chief Operating Officer, University Hospitals
Bradley Bond, CPA, CFA, MBA, Chief Financial Officer, University Hospitals
