Health systems have long turned to partnerships to expand services, add capabilities and extend their reach. But the decision to partner rather than build or expand a service independently can depend on a range of factors, from specialized expertise and capital to patient volume and market needs.
Three health system CEOs recently spoke with Becker’s about partnerships their organizations are growing, what makes those arrangements worth pursuing and how they decide where a partner can add value.
Providence: Reducing administrative burden
For Renton, Wash.-based Providence, one area of focus is home-based care. The system holds equal ownership with Compassus in a joint venture covering home health, hospice, community-based palliative care and private duty services, operating as Providence at Home with Compassus. The venture launched in Alaska, Texas and Washington in March 2025, expanded into California in October and cleared Oregon regulatory review this spring.
“We are 50-50 owners, partners with them in home care, hospice and private duty across our seven states,” Providence President and CEO Erik Wexler told Becker’s. “We are expanding that access to home care in the communities that we serve. We’re about to complete the close of the Compassus relationship in Oregon. We just got through the regulatory process.”
Providence already operated a large home care business, but Mr. Wexler said Compassus brought infrastructure and expertise specific to that type of care.
“We had a large home care organization within the health system, but we didn’t have a specialized information system just for home care. We didn’t have a specialized recruitment process just for home caregivers,” Mr. Wexler said. “By joining up with Compassus, we’ve been able to utilize their expertise to advance the platform that we once wholly owned.”
Implementing the partnership also required Providence to change the sequence of other work. The system had planned to implement acute rehab services but paused that effort to focus resources on the Compassus rollout. Acute rehab implementation is now scheduled to begin in the second half of 2026 and continue into 2027.
Providence is also an owner of Longitude Health, an innovation consortium launched in 2024 by Providence and three other nonprofit health systems. The venture since has rolled out a specialty pharmacy platform and is developing shared back-office capabilities. Mr. Wexler said one area under consideration is call centers, which health systems often operate independently.
“A lot of us health systems have our individual call centers. We have several call centers within Providence, and the hope is we’re going to take our several call centers and combine them with Longitude Health and the other partners that are in there to improve our performance, but also gain scale and reduce administrative burden,” he said.
Why UVA Health insists on 10-year contracts
At Charlottesville, Va.-based UVA Health, the case for partnering starts with determining which programs a health system should not build. Mitchell Rosner, MD, CEO of UVA Health and executive vice president for health affairs at the University of Virginia, said capital constraints are only part of the calculation.
“Fundamentally, I think there are few organizations that really have capital right now to go and have the big merger, the acquisition, and increasingly I think there’s also a recognition that having low-volume programs that are not of the highest quality, that could be very expensive, are also not in the best interest of patients, communities and health systems,” Dr. Rosner said.
He pointed to pediatric bone marrow transplant as a program UVA Health decided to route rather than replicate. Richmond-based Virginia Commonwealth University has an established program, and the procedure volume statewide is small.
“There may be a dozen of those a year. Well, we partner with VCU to send our children over there to get the bone marrow transplant, and we do the pre- and post-care for the children, but we recognize that building that program may not make a lot of sense,” he said. “On the other hand, we have a really strong congenital heart program, and so kids will come here throughout the state to get their congenital heart surgery, and that’s a partnership we have with other hospitals in the state.”
Dr. Rosner said several other partnerships in development follow a similar model: UVA Health has a capability it can extend through its academic network while a regional or community hospital has a need it cannot meet alone.
He said those arrangements have been developing over the past four or five years, with most taking about a year to complete. Either organization may initiate the discussion.
“We’ll go out and we’ll say, ‘We think there’s a need in this community.’ We’ll contact a local smaller hospital to see if we can be of service. But oftentimes a hospital will come to us and say, ‘We want to help build a program, but we recognize we need a partner to do that,'” Dr. Rosner said.
UVA Health also uses contract length to help ensure a partnership does not become a temporary arrangement while the other organization rebuilds the capability itself.
“One is that there has to be a sense that truly it’s a partnership, that you’re not just meeting a need for a health system that may have lost clinical staff, and they may come in behind you developing this program and hire their own at some time. That’s not of interest, I think, to most health systems that want to be in the partnership area,” he said. “So one is that we insist on the contracts being long, 10 years’ duration. We want to create some stickiness so that we’re building a relationship around these programs and not just a transaction around meeting a need that may be short term.”
Dr. Rosner said arrangements that address only a temporary need do not meet his definition of a partnership.
“Where they fail is where that doesn’t happen. When it just meets sort of an itinerant need for a program, that’s not really interesting to me, and that’s not a partnership. But that, I think, is oftentimes the norm in healthcare,” he said.
Texas Health: ‘Strengthening capabilities in the marketplace’
Arlington, Texas-based Texas Health Resources has pursued capability-based partnerships for years. CEO Barclay Berdan said the system has repeatedly been approached by organizations interested in entering the Dallas-Fort Worth market but has chosen not to pursue those opportunities.
“We feel like in all those cases so far that those would be dilutive to us, and have chosen not to pursue any of those opportunities,” Mr. Berdan said.
The system’s board has continued to direct Texas Health to focus its growth within North Texas, where it is the market leader. Mr. Berdan said he is skeptical about the scale economies that can result from large mergers and acquisitions and has favored partnerships that add specific capabilities.
“If you look at our partnerships from the early days on, they’ve been about capabilities. And I think that’s where we’ve concentrated for the most part,” he said.
Texas Health has built roughly 35 ASCs in North Texas with SCA and developed imaging centers with Envision Imaging. It also operates a clinically integrated network with Dallas-based UT Southwestern Medical Center, giving the system access to research, education and quaternary services.
“We did those [partnerships] because the companies we’ve partnered with are better than we are at doing those specific things,” Mr. Berdan said.
The system also took a deliberate approach to where it placed imaging centers.
“The first ones I put in place were not next to my hospitals; they were next to my competitors’ hospitals,” he said.
The system’s newest partnership is with PT Solutions. Texas Health has three physical therapy sites open and is looking to add two more as it expands outpatient therapy beyond its hospital locations.
“So that’s essentially been our approach to partnerships. It’s more really about expanding and strengthening capabilities in the marketplace than it is about gaining ground in geography,” Mr. Berdan said.
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