The strategic calculus for health systems is shifting. Outpatient revenue has grown at a faster clip than inpatient revenue over the last few years and now health systems are seeing ambulatory services as a critical business line.
Outpatient revenue per calendar day jumped 27% from February 2023 to February 2026, compared to 23% for inpatient revenue, according to Kaufman Hall’s National Hospital Flash Report.https://www.kaufmanhall.com/insights/research-report/national-hospital-flash-report-february-2026-data
With inpatient volumes facing long-term pressure from payer mix changes, site-of-care shifts and declining length of stay, hospital leaders increasingly see outpatient expansion as an engine of revenue growth through the next five years. Across system types and geographies, executives are making similar bets. They’re investing in ambulatory surgery centers, expanding primary care access, building out behavioral health capacity, and deepening ties with employers and communities.
“By 2030, survival for health systems will hinge on revenue streams that reduce reliance on inpatient volume alone,” said Stephanie Prechowski, MSN, RN, associate chief operating officer of emergency, psychiatry, and surgical services at Michigan Medicine in Ann Arbor. “At Michigan Medicine, we see the greatest opportunity in tight integration of ambulatory growth, advanced access models, and digitally enabled care that meets patients where they are while lowering cost to serve.”
Ms. Prechowski also pointed to operational excellence as a revenue strategy in its own right, arguing that systems capable of delivering consistent capacity and throughput will be better positioned to attract patients and payer contracts in an increasingly competitive market.
Ray Vara Jr., president and CEO of Hawai’i Pacific Health in Honolulu, said his system has spent more than a decade building the ambulatory infrastructure to support that vision, investing in surgery centers, imaging centers, and urgent care facilities designed to lower the cost of care while generating revenue beyond the hospital walls.
“We’ve made real progress by strengthening care teams, integrating services, and expanding access points beyond the hospital through investments in ambulatory surgery centers, imaging centers, urgent care, innovative health care companies, and clinical technology,” he said. “These efforts have lowered the cost of care, improved clinical performance, and created alternative revenue sources essential to sustaining our mission.”
The outpatient imperative looks different for rural systems, where limited volumes and specialist shortages require a more creative approach. Rick E. Smith, CEO of Troy (Ala.) Regional Medical Center, has built his facility’s outpatient strategy around services that keep patients close to home.
“We know that inpatient volumes will continue to decline so we must depend on our outpatient services to provide a margin,” he said. “Those include same day surgery, imaging, and infusion services. We are also partnering with some of the community industries to provide on-site occupational medicine services, so their employees never leave the business site.”
Mr. Smith noted that telehealth has become essential for extending specialty access without requiring specialist employment, which makes particular sense for high-volume transfer diagnoses.
“We are currently evaluating tele-nephrology so we can potentially avoid the 100+ transfers per year we currently experience,” he said.
Niche service lines — geriatric psychiatry and medical addiction services — as meaningful margin contributors that many area hospitals do not offer, giving Troy Regional a differentiated position in its market. Behavioral health, long underfunded and underbuilt, is emerging as both a mission priority and a genuine financial growth lever.
Deborah Visconi, president and CEO of Bergen New Bridge Medical Center in Paramus, N.J., named behavioral health and chronic disease management as the central focus of her system’s push into ambulatory and community-based care.
“Looking ahead to 2030, I believe survival for health systems will depend on our ability to diversify beyond traditional inpatient and fee-for-service models,” she said. “For us, that means expanding into ambulatory and community-based care, particularly in behavioral health and chronic disease management, where demand continues to outpace supply.”
Ms. Visconi also noted that workforce innovation, rethinking how and by whom care is delivered, will be essential for long-term sustainability.
“Digital health and virtual care will continue to open new front doors, but only if they are integrated thoughtfully into care delivery and reimbursement structures,” she said. “Additionally, workforce innovation, rethinking how care is delivered and by whom, will be essential not just for cost containment but for unlocking new models of care.”
For physician group leaders, the opportunity centers on ancillary service development and value-based arrangements. Roger Mitty, MD, president of Care New England Medical Group in Providence, R.I., said that while the migration from fee-for-service has been slower than many predicted, the direction is clear and physician groups that move now will be best positioned.
“From the lens of someone leading an employed physician group, opportunities to explore other revenue streams such as partnerships in ambulatory surgery centers and the development of internal ancillary services programs remain in the forefront and will likely guide success over the next five to 10 years,” he said.
Timothy Layman, DNP, MSN, RN, president and chief administrative officer of St. Mary’s Hospital at Hospital Sisters Health System in Green Bay, Wis., offered an expansive vision of how the hospital revenue model must evolve so the facility itself becomes a platform for care delivered anywhere.
“Hospital survival by 2030 will depend on diversifying beyond traditional inpatient revenue into scalable, consumer-centric models,” he said. “Systems that build robust ‘hospital-at-home’ and on-demand acute care services will reduce length of stay, free up bed capacity, and capture revenue at a lower cost structure.”
He sees subscription-based primary and specialty care models with strong digital engagement as a big opportunity to capture the consumerism wave in healthcare.
“Hospitals that invest in ambulatory surgery centers, retail health and employer-direct contracting will shift volume to lower-cost settings while maintaining margin,” he said. “Ultimately, the winners will operate as hybrid care platforms, delivering care anytime, anywhere, while aggressively managing cost through on-demand staffing, supply chain optimization and virtual care infrastructure.”
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