Beyond ownership: How health systems are rethinking partnership and outpatient strategy

Health system executives are reimagining how they grow, partner, and compete. For many organizations, full integration or acquisition is no longer the preferred or available path. Instead, leaders are turning to a broader range of partnership models while accelerating investment in outpatient and ambulatory infrastructure. McDermott Will & Schulte examines the evolving partnership landscape, outlines the strategic imperatives driving ambulatory growth, and explores how physician alignment, payor strategy, and AI adoption are reshaping what it means to build a durable, high-performing health system.

The rules of healthcare growth have changed. For years, health system development strategy was largely synonymous with mergers and acquisitions. That model hasn’t disappeared, but it has shifted to become more flexible and durable in the face of today’s challenges. The current healthcare environment is marked by reimbursement uncertainty, rising costs, capital constraints, and a more complex antitrust landscape. In response, many hospital and health system executives are rethinking what growth means, what partnership looks like, and where care should be delivered.

Evolving partnerships to meet today’s challenges

Growth strategies are moving away from aggressive external acquisitions and toward a more varied and organic range of partnerships. These newer relationships extend well beyond traditional hospital-to-hospital models to encompass technology companies, post-acute care providers, and myriad nontraditional collaborators.

Today’s growth structures are also more diverse, featuring affiliations, joint operating agreements, service-line partnerships, ambulatory joint ventures, payor-provider arrangements, technology collaborations, and shared services platforms. Unlike previous strategies that relied on ownership, today’s partnership models prioritize alignment via shared economics, governance, clinical integration, and operational control.

The impetus for many of these arrangements independence. As financial pressure mounts, affiliation models allow community and regional hospitals to access scale, technology, and management expertise without relinquishing autonomy. But this requires careful upfront work. Governance design, exclusivity terms, antitrust considerations, community commitments, and exit rights all need to be addressed before the ink dries.

Perhaps most importantly, today’s successful partnerships are not solely transactional. Health system leaders are consistent on this point: the most effective relationships are personal and grounded in shared values. Early alignment on culture and outcomes is often a reliable predictor of whether the partnership will deliver.

Outpatient strategy is now a competitive imperative

If partnership structure is evolving, the direction of growth is increasingly clear: outpatient and ambulatory services are the growth engines for health systems today. Ambulatory surgery centers, imaging, urgent care, specialty clinics, home-based care, and virtual care are increasingly central to a system’s economic performance and competitive positioning. In fact, many health system leaders will tell you candidly: if they were building their organization from scratch today, they would design it to be far more outpatient- and ambulatory-centric, prioritizing easier access and seamless integration across the care continuum.

In a compressed market, systems with limited ambulatory infrastructure risk losing commercially attractive services and patient access points to competitors who move faster. As a result, many health systems are redesigning care pathways, evaluating site-of-service economics, aligning physicians around ambulatory models, and making deliberate decisions about which services should remain hospital-based and which should move into distributed or home settings.

Patient access has emerged as a major strategic differentiator. The most forward-thinking systems are embracing a mindset shift by making access the system’s responsibility, not the patient’s burden. That reorientation has significant implications for how systems deploy technology, design referral pathways, and structure partnerships.

Physician and payor alignment: A strategy you can’t separate

Outpatient strategy and partnership strategy both depend on durable physician relationships and increasingly sophisticated payor arrangements. Specialist access, referral stability, and ambulatory growth all hinge on physician alignment, an area requiring dedicated attention and investment. At the same time, health system leaders are expanding their thinking around payor strategy. Provider-sponsored health plans, Medicare Advantage partnerships, delegated risk arrangements, bundled payments, and population health infrastructure are all part of the conversation.

These models offer meaningful opportunities for economic diversification and growth, particularly as traditional reimbursement models face ongoing pressure, but they also introduce complexity. Compensation structures, fraud and abuse considerations, insurance regulatory requirements, and governance design all merit careful attention.

Managing AI and digital infrastructure thoughtfully

No strategic conversation in healthcare today is complete without a discussion of artificial intelligence (AI). AI touches nearly every operational domain in health systems, from clinical documentation, ambient listening, and scheduling, to revenue cycle optimization, prior authorization, and care management. The potential is undeniable: AI tools are already reducing documentation burden, improving provider productivity, and expanding patient access. The trajectory points toward AI becoming embedded in both healthcare operations and clinical care in a fundamental way. As a result, many systems are seeking out ways to support broad adoption and practitioner-level capability across the organization, not just in IT departments.

A key lesson from early adopters is the importance of a people-centered focus. Change management, not the technology itself, is often the biggest barrier to realizing AI’s benefits. Deploying AI effectively necessitates governance structures that can move quickly, organizational cultures that can adapt, and leadership willing to prioritize and sequence implementation thoughtfully given finite resources.

AI also introduces risks that executives must actively manage. Privacy, data rights, vendor oversight, bias, auditability, and cybersecurity implications all demand rigorous attention alongside the operational upside.

What the moment requires

Health system executives today are navigating genuine complexity amid Medicaid shifts, labor shortages, historic financial and payor pressures, and the demands of organizational transformation at scale. Health systems that will thrive are those building differentiated ambulatory infrastructure, forming partnerships grounded in shared values rather than transactional convenience, aligning physicians and payors around durable economic models, and deploying technology through a lens of change management as much as capability.

Scale still matters, but size alone won’t solve challenges if the right capabilities are absent. The mission remains local even as strategies become increasingly sophisticated. And in that tension between community commitment and the imperative to innovate lies the defining leadership challenge of this moment in health system strategy.

Additional resources

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