In brief

In brief

  • While they agree that change is inevitable, health system C-suite leaders don’t agree on what patients want and how to deliver it.
  • Most health system leaders view experience as the top competitive differentiator although they believe that patients prioritize cost in selecting providers.
  • This lack of alignment is a liability given the new competitive drivers emerging in the healthcare landscape.


We surveyed more than 250 health system C-suite executives to discover their views on what’s driving change now and over the next decade, as well as how they expect changes to affect their organizations—and how they will respond.

At a fork in the road

Health systems have been slowly changing over the years—expanding outpatient footprints in service of high-margin inpatient procedures. But incrementalism will not work anymore. A new era of humanizing healthcare to improve access, experience and outcomes is dawning. Health systems can still have a key role to play in building it, yet our survey reveals a lack of clarity and consensus among leaders about the road ahead.

Leaders see writing on the wall

Most health system leaders expect the healthcare landscape to evolve. Consider their views of the growth of alternative care settings (which include home health and virtual health) over the next decade. They expect these models to roughly double by 2030. This finding suggests that they see the combination of consumer demand and competitive pressures driving the continued growth of care delivery models that provide better experiences at greater value.

Health system leaders are also becoming attuned to the technology advancements driving health system business model transformation. Leaders most commonly cite data interoperability as a critical influence today—27% select it as a top factor. But while half (49%) believe artificial intelligence will take over as the leading driver, 32% believe that will not be the case until 2030.

The more that leaders align around what the health system of the future looks like, the more competitive they can be.

Misalignment among leaders

Health system executives believe that the future will be different—in everything from changes in care settings to technology advancements. In fact, CEOs expect the most change. But the C-suite as a group does not agree on what matters the most to patients today—or what will matter tomorrow.

For example, some leaders think that people prioritize cost over experience now and will not prioritize experience-driven factors the most until 2030. But a deeper look at role-specific responses reveals that executives’ views vary widely.

Most health system leaders view experience as the top competitive differentiator although they believe that patients prioritize cost in selecting providers.

Even more problematic is that CEOs’ views are sometimes diametrically opposed to those of others on the executive team as whole. CEOs think that people prioritize experience-driven factors now and will value cost more in the future.

Believing one thing, doing another

There is also a disconnect between what health system leaders believe that people want, and how they are differentiating their organizations today and in the future. Most of the C-suite believe that people prioritize cost when selecting a provider. Yet they are not differentiating based on value transparency: Just 15% prioritize pricing transparency and the value of services to patients and payers.

And while 45% of health systems leaders prioritize patient experience to stand out among competitors, our experience suggests that few are incorporating clearly popular virtual technologies and home-based services into their delivery models in a meaningful way, possibly still inhibited by payment models.

Seventy-nine percent of health system leaders—and 85% of CEOs specifically—see substantial or transformative change ahead.

Making a tough competitive landscape tougher

This organizational misalignment between awareness and action has consequences beyond C-suite disagreements. One in four health system leaders reports that it is the biggest barrier to being more patient centric—a massive liability for provider organizations and the people they treat.

Health systems that aren’t aligned around what matters to patients could struggle as competitive incumbents and new entrants fill the void. Most leaders (83%) think vertically integrated payers and outside-of-market health systems are the biggest threats, followed by in-market health systems. The problem with this perspective is that it’s tied to the traditional competitive model, which is being threatened by disruptors pushing into direct provision of primary care.

Take action: From new rules to new rewards

Health systems should take action to preserve their competitiveness in line with the new rules of competitiveness. The place to begin is by making changes across three critical opportunity areas.

1. Rally around human-centered experience.

There is opportunity to shift from traditional views of patient experience—improving access to drive revenue—to truly reimagining every aspect of the patient journey around individuals.

2. Improve understanding of value.

Health systems can offer intuitive, Amazon-like shopping experiences so patients can make informed decisions. This can include combining transparent cost, quality - information all in one place.

Prepare now for tectonic, intelligence-driven transformation.

The ability to abstract data and processing to the cloud supports predictive visibility into patients’ individual clinical journeys, which is a game changer.

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The imperative to change is clear. Health systems that don’t respond appropriately to the transformation happening around them risk a continuous erosion of the perceived and actual value they deliver, which can translate into loss of growth and eventual shrinkage.

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