---
title: "The Strategic Growth Imperative: 2025 and Beyond"
description: In recent years, healthcare providers have focused on operational improvements to manage margins, but in 2025, growth will reemerge as a strategic imperative.
image: https://www.luminahp.com/hubfs/Trends.png
---

# The Strategic Growth Imperative: 2025 and Beyond

 By [Annette Kenney](https://www.luminahp.com/blog/author/annette-kenney) | Posted in [Insights](https://www.luminahp.com/blog/topic/insights)

![Post Featured Image](https://www.luminahp.com/hubfs/Trends.png)

By Annette Kenney, Principal, Lumina Health Partners

Entering 2025, many healthcare systems continue to struggle with slim to negative margins.  
Unrelenting cost pressures, increases in uncompensated care, and disproportionate growth  
in Medicare and Medicaid volumes have thwarted a significant and widespread post-  
pandemic return to profitability. The continued progression of Medicare Advantage and  
value-based payment models have added further complexity to margin improvement  
strategies.

Understandably, health systems have focused on cost management and operational  
improvement in turning the proverbial ship around. Growth strategies have proceeded more  
cautiously, with capital constraints limiting the level of strategic investment within reach.  
However, health systems need a reasonable balance of operational improvement and  
revenue growth strategies to ensure long term financial viability, and they are starting to  
challenge this more conservative approach to growth.  
While a new administration always brings some level of uncertainty about the direction of  
healthcare policy, a few things are clear:

- Government reimbursement is unlikely to increase.
- Medicare Advantage and value-based reimbursement models will continue to grow  
  (although likely tweaked).
- Capital constraints—coupled in many markets with capacity constraints—will challenge traditional growth strategies.

The focus on operational improvement must remain a priority—and in fact, it must become  
an organizational competency. However, this does not have to come at the cost of a careful  
and disciplined approach to strategic growth.

Growth Levers  
The good news is that growth levers do exist--but how we think about them may change given  
the current mix of challenges. While there is no single prescription for growth and every  
market is faced with different opportunities, we can expect a greater focus on primary care,  
access and throughput, care management, AI and digital transformation and less focus on  
building new beds, operating rooms and buildings—particularly in more mature and  
consolidated markets.

There are five key levers that heath systems can pull to activate s successful growth strategy:

1. **Acute Environment: **Focus on patient safety, outcomes, and experience will  
   continue to be essential. However, “smart growth” in the acute environment will  
   require attracting more revenue-producing procedural cases—ideally without  
   expensive facility expansion. Investments in care management and patient flow tools  
   that reduce avoidable inpatient admissions and length of stay will increase bed  
   capacity for higher revenue procedural cases. Similarly, investment in artificial  
   intelligence (AI) and digital tools that optimize operating room (OR) scheduling and  
   patient flow will improve throughput, effectively increasing the capacity of operating  
   and procedure rooms. These improvements result in more efficient and timely care—  
   a real competitive differentiator for surgeons and patients alike.
2. **Physician Enterprise:** Physicians continue to be key to health system growth and  
   performance. “Smart growth” strategies go beyond increasing the number of  
   employed physicians and focus on right-sizing the network to meet demand while  
   consciously balancing the mix of primary care and specialists to ensure access goals  
   are met. In many systems this will mean growing the primary care base through  
   aggressive recruitment and retention efforts, fully integrating Advanced Practice  
   Clinicians (APCs) and reducing the administrative burden on providers.
   
   Beyond these strategies, alignment of both employed and independent--around  
   growth and performance goals is critical. Engaging physicians in strategic planning  
   and medical group governance, developing opportunities for active involvement in  
   Clinically Integrated Networks, and pursuing mutually beneficial joint ventures and  
   partnerships are all effective alignment vehicles. Additionally, investing in AI and  
   digital tools that can streamline physician workflows and bring back time in the day  
   can go a long way in demonstrating commitment and engendering trust,  
   differentiating the organization as the place where physicians want to practice.
3. **Ambulatory Network:** Care will continue to migrate to lower cost settings, whether  
   that be ambulatory care centers or the home. The goal is to keep volume in the  
   system even as it shifts out of the hospital. Health systems need to provide the right  
   geographic distribution of ambulatory sites and services to support access while  
   considering new opportunities in home-based care. At the same time, they need to  
   leverage virtual care and remote patient monitoring along with digital tools that keep  
   patients engaged and connected as they move from one setting to the next.
4. **Clinical service lines: **Health systems have traditionally developed “centers of  
   excellence” as a strategy to differentiate its strongest and most important clinical  
   service lines. Unfortunately, these efforts have often failed to achieve their ambitious  
   growth goals. Clinical service line development can still be a highly effective growth  
   strategy if organizations build a trusted brand—which can only be achieved by  
   consistently demonstrating the highest level of performance in both clinical  
   outcomes and patient experience. This goes beyond marketing campaigns and tag  
   lines and requires an honest assessment of capabilities and performance.  
   Developing clinical service lines that consistently deliver on a differentiated brand  
   promise will attract more patients from the local market, expand regional draw, and  
   ensure the organization is valued as a “must have” in Medicare Advantage and other  
   managed care networks.
5. **Patient Experience:** Retaining a patient is significantly less expensive than acquiring  
   a new one—yet 20-30% of revenue from existing patients is typically leaked to other  
   systems. Capturing even a portion of this leakage by improving the patient’s  
   experience represents an enormous growth opportunity. Health systems often  
   measure patient experience based on a single encounter. The patient, however,  
   assesses experience through an entire journey - an endless number of frustrating  
   steps starting with searching for care and proceeding through scheduling, arrival,  
   waiting, billing, and follow up. Each step introduces multiple sources of  
   dissatisfaction - “off ramps” that can influence patients to seek other providers.  
   “Smart growth” requires a strategy that connects the dots seamlessly for patients,  
   creating a journey-wide experience that is so great there is no reason to seek care  
   elsewhere.

**Positioning for Success**  
It is not easy, but growth opportunities do exist, even in the most competitive markets. No  
organization can do it all, but a thoughtful approach to strategic planning can prioritize areas  
of focus that will generate the greatest short- and long-term results. Strategies that optimize  
existing assets, attribute new patients while reducing total cost of care, align physicians  
around growth and performance, and radically improve the patient experience are sure bets  
for most organizations. Fortunately, we have a golden opportunity to leverage AI and digital  
tools to accelerate these strategies, turning challenges into opportunities.

Discipline Around Strategy & Execution  
Prioritizing, planning, and executing growth strategies is hard work and requires  
commitment and discipline. Organizations need to resist a scatter-shot approach, reacting  
to many good but siloed ideas, in favor of a unified strategic growth plan.

Given the plethora of distractions, the multitude of stakeholders and the complexity of  
interrelated strategies, it can be hard to know where to begin. A structured approach to  
strategy development will preempt the potential for organizational paralysis. This requires  
the following:

- An objective assessment of challenges and opportunities across each of the five  
  growth levers (as noted above).
- Prioritization or strategies and investments that will generate the greatest short- and  
  long-term results.
- Discipline around execution, including establishment and communication of clear  
  goals, the development and tracking of relevant “smart growth” key performance  
  indicators (KPIs), and a coordinated approach to business planning and project  
  management.

Stakeholder alignment and commitment is critical to successful strategy execution. This  
requires frequent and widespread education and communication to board, leadership,  
physicians and other stakeholders—including employees--about the “why” behind  
prioritized strategies as well progress (or lack thereof) against established goals. Continued  
leadership discipline around strategic planning will ultimately create the organizational  
muscle that is required to remain focused on growth, make sound decisions, and achieve  
outsized results.

For more information, visit Lumina Health Partners at [www.luminahp.com](https://www.luminahp.com/)

![Annette Kenney](https://www.luminahp.com/hs-fs/hubfs/Annette%20Headshot.png?width=100&height=100&name=Annette%20Headshot.png)

#### By [Annette Kenney](https://www.luminahp.com/blog/author/annette-kenney)

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