For years, the prescription for a struggling health system was familiar: grow volume, grow revenue, and use the growth to fix whatever else was wrong. More patients meant more revenue, and the capacity to solve problems. The logic was circular but comfortable.
Executives who have watched it play out are no longer sure it holds.
The assumption that volume growth solves financial and operational challenges isn’t the default anymore. Instead, health system leaders are finding that adding scale amplifies whatever already exists inside an organization — its strengths and its inefficiencies.
Naveen Mehrotra, MD, president of medical staff at Saint Peter’s Healthcare System in New Brunswick, N.J., said the shift has been among the most important strategic changes in how his organization thinks. Instead of focusing solely on scale, his team now asks before scaling anything — a service line, a process, a technology deployment — is whether the underlying structure is actually ready for it.
“We’ve moved from a mindset of ‘build and grow first’ to ‘design it right, prove it works, and then scale it,'” he said.
That reframing is happening across system types. At Parkside Psychiatric Hospital and Clinic in Tulsa, Okla., CFO Brad Bivens said behavioral health has a particularly sharp gap between volume and value.
“In behavioral health, demand for services is significant, but adding volume without addressing underlying processes, staffing models and reimbursement can actually compound inefficiencies,” Mr. Bivens said.
Parkside has shifted its focus to matching staffing to patient demand, improving revenue cycle performance and evaluating service lines based on mission alongside sustainability. These are all moves that do not register in volume figures but that Mr. Bivens believes are building a more durable organization.
Mark Sevco, president of Allegheny Health Network in Pittsburgh, said the same reasoning has driven his system to focus on reducing avoidable admissions and readmissions rather than maximizing inpatient volume.
“We have fully abandoned the assumption that volume expansion, particularly in high-cost acute care settings, can sustainably offset inflationary pressures,” Mr. Sevco said.
As part of Highmark Health’s integrated payer-provider structure, Allegheny has a direct economic incentive to reduce unnecessary utilization rather than grow it, a structural alignment complimenting the system’s new strategic mindset.
Matt Fry, president and CEO of Freeman Health System in Joplin, Mo., added a patient-centered framework to rethinking growth. The frustration points for caregivers and patients are typically the same, which means operational efficiency and patient-centeredness are not competing priorities.
“We’ve learned that reducing friction, improving access, and simplifying the healthcare experience leads to better outcomes for everyone,” Mr. Fry said. “As a nonprofit hospital, our mission starts with patients, which means we’re increasingly willing to challenge long-standing processes. After all, ‘we’ve always done it that way’ is rarely a compelling strategy.”
