Strategy Spotlight: The case for an ambulatory-focused strategy

As health systems face growing pressure to lower costs, increase market share and run more efficiently, one thing is clear — the strength of their ambulatory care portfolio is quickly becoming a key differentiator.

The divide between high- and low-performing systems continues to widen, and the growth of outpatient revenue plays a significant role. According to Kaufman Hall’s recent National Hospital Flash Report, outpatient revenue grew 33% in the past three years, almost double the 18% growth in inpatient revenue. Leading health systems are taking advantage of the opportunities and driving a majority of their enterprise revenue from ambulatory care.

Shaping the future

Payers are accelerating the move away from hospital-based care in favor of lower-cost outpatient settings. As such, procedures are shifting out of hospital outpatient departments into ambulatory surgery centers and office-based environments. For example, Sg2 projects a 17% increase in procedures performed at ambulatory service centers (ASCs) over the next decade, a shift driven by aging demographics, technological advancements, and CMS decisions to remove certain procedures such as knee and hip replacements from the Inpatient Only List (IPO).

As value-based care becomes more entrenched — emphasizing quality outcomes and cost effectiveness — high-performing ambulatory services are proving essential to both financial stability and access. Ambulatory care helps alleviate the strain on hospital resources by providing care for less complex conditions and allowing hospitals to focus on more critical cases. Ambulatory settings typically provide more flexible scheduling options and better geographic accessibility, leading to timely access to care that results in better patient outcomes and higher satisfaction.

In other words, ambulatory care isn’t a side strategy anymore — it’s the strategy.

In the past, inpatient services drove most health system revenue. While ambulatory care doesn’t generate as much revenue per visit, it can deliver stronger margins when structured deliberately. With the right alignment and operating model, these outpatient networks can scale efficiently and even help offset losses on the inpatient side — offering a financial buffer in an increasingly volatile landscape.

From feeder to focal point

Ambulatory care used to serve mainly as a referral engine for acute care. Now, it’s a complex, competitive business line with its own growth trajectory. Depending on the organization, an ambulatory portfolio might include a mix of urgent care centers, primary care, surgery centers, joint ventures and medical groups — all with unique infrastructure, staffing, real estate and reimbursement considerations.

It’s a diverse and demanding ecosystem and managing it well requires tight clinical and business integration. Yet many health systems still treat ambulatory care as an afterthought — a collection of assets loosely tethered to the hospital, often added reactively or opportunistically.

That piecemeal approach leads to underperformance. Health systems need a multidisciplinary ambulatory aligned strategy that includes setting up governance and leadership, establishing a growth strategy, optimizing efficiency of existing assets and creating an implementation playbook. Without such a structure, the potential for ambulatory care to drive growth and value remains untapped.

Structure must follow strategy

If systems want to close the performance gap, they need to treat ambulatory care like the critical business line it is. That means giving it dedicated governance and clear leadership accountability that ensures strategic, operational and financial alignment. Here are key questions healthcare leaders should consider as part of their ambulatory growth plan:

• How often do we review and adjust our ambulatory strategy based on market shifts, performance data and consumer needs?
• Are our ambulatory assets helping us defend and grow market share in our priority geographies and service lines?
• Are we capturing downstream revenue and creating care continuity across the patient journey?
• Are we expanding intentionally (with data and strategy) or incrementally (with risk of dilution)?

Strategic restructuring is foundational to financial health, care access and staying relevant in a rapidly evolving healthcare economy. The organizations that move now — streamlining oversight, aligning resources and building strong ambulatory capabilities — won’t just stay competitive in their markets.

They’ll shape the future of care.

Watch for our 2026 article series outlining a multidisciplinary ambulatory aligned strategy that includes setting up governance and leadership, establishing a growth strategy, optimizing efficiency of existing assets and creating an implementation playbook.