Navigating the destination care landscape
Destination services — defined as hospital services patients travel greater than 150 miles to receive — remain a strategic growth priority, especially for academic medical centers (AMCs) and children’s hospitals. Historically, destination services have been driven by strong hospital and health system brand reputation, renowned physicians, and world-class research and clinical trial opportunity and expertise. Yet today, in a dynamic landscape shaped by rising healthcare consumer costs, elevated capabilities at community and regional centers, and the growth of virtual care services, patients have more choice, disrupting traditional destination care models.
To continue to grow this service offering, hospitals and health system leaders should deeply understand market trends, clinical growth trajectories, and quality and cost performance benchmarks that underlie the destination care opportunity. In an increasingly competitive landscape, targeted identification of high-performance services with the potential to increase access and draw patients from a wider radius is essential for long-term viability. Otherwise, financial sustainability, consumer satisfaction and brand reputation will be threatened.
Destination services span across all services lines
The draw for destination services goes beyond a hospital’s traditional primary and secondary service areas, which are typically used to measure market share. Trends within Vizient’s destination services database show that travel rates for destination services are consistent. Recent analysis compared 2024 data with 2021 data and illustrated the overall national travel rate for inpatient discharges is 4% for adults and 5% for pediatrics. Among those traveling over 150 miles for care, 59% of adults and 45% of pediatric patients traveled more than 300 miles. On average, 50% of travel volume for the top 10 US destination healthcare centers comes from more than 300 miles away. Figure 1 shows rates broken down by service line along with the top volume destinations for each.
Specialty example: pediatrics
- Pediatric destination care trends: Pediatric care consistently attracts higher national travel rates across most inpatient service lines compared to adult services. Figure 2 shows that behavioral health, spine and cancer service lines have the highest travel rates in pediatrics. While top-ranked freestanding children’s hospitals like Texas Children’s Hospital attract pediatric destination volume across multiple service lines, select specialty hospitals emerge as leading destination centers for targeted conditions. Examples include Perimeter Healthcare for acute child and adolescent behavioral health services and Gillette Children’s Specialty Hospital for orthopedic surgery. Top performers vary by service line, reflecting both the specialized nature of care and the expansive geographies they serve.
- Regionalization and access considerations: Complex pediatric cases are increasingly centralized at large urban children’s hospitals and academic medical centers. Some pediatric destination volumes may not reflect consumer choice but rather the community access gaps or demand for highly specialized expertise that only exists in select children’s hospitals. Partnerships developed to extend subspecialty access and keep care close to home will also funnel high-acuity cases from an extended catchment area to the tertiary center. Though separate from consumer-focused destination care, these regional strategies aimed at optimizing resources support growth in destination volumes.
- Opportunities to dive deeper: Strategic approaches to grow destination services will vary by subspecialty, geography, payer dynamics and more. Children’s hospitals that cover large geographies, like Texas or the mountain states, may choose higher mile thresholds to define as “destination” (e.g., 300+ miles). Highly reputable organizations may offer a standard approach to attracting destination volumes for all services (e.g., virtual second opinion), while others may home in on one to two specialized providers. Regardless of these differences, Medicaid will continue to be a prominent payer, and resources dedicated to navigating out-of-state coverage will be essential to success.
Specialty example: cancer
- Evolving landscape of cancer destination services: Destination cancer programs have traditionally resided within AMCs, focused on treating rare tumor types, higher-acuity patients and complex procedures. As shown in Table 1, inpatient volumes for the top cancer types with the highest travel rates are projected to remain relatively flat from 2024 to 2034. With the ongoing shift of cancer treatment to ambulatory settings, leading programs must plan for the outpatient volume growth for the next decade to further position themselves for destination services. As an example, the delivery of advanced treatments like chimeric antigen receptor (CAR) T-cell therapy is increasingly moving to outpatient settings. This trend enhances financial viability and is intensifying competition from non-academic centers, including large oncology medical groups.
- Opportunities in tumor types with lower travel rates: For tumor types with historically low travel rates, leading institutions for destination services have an opportunity to grow both inpatient and outpatient destination volume by emphasizing clinical quality, subspecialized expertise, and innovative yet differentiated capabilities, with success also hinging on the organization’s ability to accommodate new patients by enhancing access and proactively creating capacity. Figure 3 highlights projected outpatient volume growth from 2024 to 2034 for select tumor types that typically fall outside traditional destination care.
Case example: assessing an organization’s destination services
Destination service performance varies significantly by organization. The following example uses a fictitious organization to illustrate how market trends and performance metrics influence destination opportunity and what strategic actions can help sustain or grow them.
The Great State Cancer Institute experienced a 6% increase in destination volumes from Q1 2021 to Q3 2024, with 55% originating from within its home state and 45% from out-of-state and international patients. This growth reflects the institute’s targeted strategies aligned with expanding subspecialized services and expertise, strengthening its strategic reach across regional, national and international markets and adapting to evolving patient demand patterns.
Performance metrics drive destination success
As illustrated in Table 2, the organization is well positioned to expand its footprint, with strong growth trajectories in both inpatient tertiary and outpatient cancer services. However, while its length of stay and direct cost indices remain above peer benchmarks, improving 30-day readmission rates will be critical to defending market share and sustaining destination volume, given these patients travel more than 150 miles to seek care.
Why it matters
- Develop appropriate service distribution strategies. Health systems should focus on delivering the right care in the right setting by building a coordinated system that supports destination services. Community hospitals lacking volume or expertise for complex care should prioritize strengthening capacity for lower- acuity services, including downstream and follow-up services. Timely transfers back into the system for local care is also critical. This enables academic and high-resource centers to maintain access for patients who truly need specialized care. Community systems with the necessary quality and capabilities to develop tertiary or quaternary hubs and offer comparable care at a lower cost can serve as strategic destinations, enabling systems to capture and direct destination discharges more efficiently.
- Expand reach through digital and ambulatory strategies. Virtual second opinions, bundled care offerings, one-stop ambulatory hubs and lodging services are essential strategies to attract and retain patients while aligning with employer and payer expectations.
- Preserve quality differentiation. Clinical excellence remains a foundational driver of destination care. Using benchmarking tools to identify variations in outcomes not only supports continuous improvement but also strengthens an organization’s brand through measurable quality. To stand out in a competitive landscape, it is essential to proactively communicate these strengths to patients, employers and payers and work with them on insurance coverage.
- Ensure geographic access to highly specialized services. Access issues, especially in pediatrics, are growing as services regionalize and the subspecialty workforce supply lags demand. Organizations should track travel burdens and proactively build partnerships, expand telehealth, develop wraparound offerings, and advocate for commercial and Medicaid cross-state contracting to maintain and expand access.
Justin Cassidy, PhD; Kara Marlatt, PhD; Kelsey Markovich; Rhae Gamber and Setu Shah
To speak with one of our experts about destination services, cancer services, AMC and children’s hospital strategies, email membercenter@sg2.com.