The healthcare market remains dynamic. Some health system leaders anticipate a future where the same or higher volumes generate significantly less margin. Providers are being squeezed from all sides, while consumer expectations continue to rise. Facilities capital planning has always been about prioritization, but soon it will be about finding the small number of investments that truly move the needle on growth and return.
Health system executives are entering an environment where the old answer to growth — build more, own more, spread more access points across more markets — is no longer financially or operationally sustainable. Capital costs are higher, labor is tighter, reimbursement is pressured, technology cycles are accelerating, and many organizations are still operating in aging facilities that absorb scarce dollars without advancing the strategy. The result is not simply a world of “yes, and.” It is a world where every “yes” requires a clearer understanding of what the organization is willing to trade off.
That does not mean strategy is only about saying “no.” The more useful question for health systems is whether an investment is essential to the organization’s future role in the market — and, if it is, how the organization can say “yes” in a way that is financially responsible, operationally executable, and aligned with long-term viability.
For healthcare leaders, this distinction matters. A service, facility, partnership, or technology investment may be strategically aligned and still unaffordable in its preferred form. A physician enterprise may want a partnership strategy, but not every joint venture will clear the financial threshold. A system may need ambulatory growth, but not every market can support owned assets. A hospital may need additional procedural capacity, but the right answer may be an ASC rather than more hospital-based operating rooms. The harder work begins after the organization determines that the answer should be “yes.”
From Capital Approval to Capital Discipline
Historically, many health systems treated capital planning as a process for ranking requests. The practical question was often, “Which projects can we afford this year?” In today’s environment, that question is not enough. Leaders need to determine which assets, services, and capabilities are essential to market relevance — and which legacy investments are consuming capital without strengthening the organization’s future position.
This is especially true for facilities and real estate. The phrase “build it and they will come” may still work in the highest growth markets in America, but virtually everywhere else where population decline, utilization, workforce availability, payer mix erosion, and consumer expectations are changing at the same time, we need to get to more sophisticated answers. Building the next hospital, clinic, ambulatory hub, or procedural platform may create strategic flexibility — or it may lock the organization into fixed costs that limit its ability to respond to future demand.
Capital discipline therefore requires more than saying “no” to requests that do not fit the strategy. It requires better data interpretation, more creative alternatives, and a willingness to challenge assumptions about where care must be delivered, what must be owned, which services must be local, and where scale matters most.
The Trade-Offs Health Systems Are Making
The most difficult choices are not always between good and bad investments. More often, they are between competing versions of “yes.” Health systems are deciding whether to prioritize access or efficiency, ownership or flexibility, local presence or regional scale, mission-critical services or margin-generating growth, and near-term affordability or long-term market essentiality.
Access and Convenience. Many organizations are reevaluating whether they can continue to maintain every access point, screening location, diagnostic capability, or ambulatory site in every community. Consolidating services into hubs may improve utilization, staffing efficiency, and capital productivity, but it can also increase travel time, reduce neighborhood convenience, and raise health equity concerns. The question is not simply whether local access is desirable. It is whether the organization can sustain that access at the required quality, staffing, and margin level.
Technology Replacement. Major equipment decisions are becoming more consequential as replacement costs rise, and utilization varies across sites. A system may value the clinical and recruitment benefits of advanced imaging, robotics, or specialty technology, but still decide that replacing a low-utilization asset is not the best use of capital. In some cases, the better answer may be consolidation, referral alignment, extended hours at higher-volume sites, or a different partnership model.
Site-of-Care Strategy. Procedural capacity illustrates the importance of downstream thinking. Adding operating rooms to a hospital platform can solve an immediate bottleneck, but it may also constrain the organization if payer preference, physician practice patterns, and consumer demand continue to shift toward lower-cost ambulatory sites. In some markets, the strategic question is not whether capacity is needed; it is whether that capacity belongs on the hospital campus, in an ASC, through a joint venture, or in partnership with another market participant. We must weigh the tradeoffs in shifting to lower sites of care when you cannot backfill at same rate, lose HOPD subsidies, and increase provider windshield time — because of payer preference and consumer convenience.
Ownership and Control. Health systems are also reconsidering how much they need to own. Direct ownership can preserve control, brand presence, and strategic optionality. Third-party capital, partnerships, monetization strategies, or equipment-as-a-service models may create flexibility and preserve cash for higher-priority needs. The decision is rarely theoretical. It depends on whether control is essential to the strategy, whether the asset strengthens market position, and whether outside capital introduces unacceptable operational or strategic trade-offs.
Aging Facilities. One of the clearest places to apply discipline is the legacy campus or building that continues to absorb capital without advancing enterprise strategy. Saying “no” to older buildings does not mean abandoning communities or mission. It may mean redirecting scarce dollars away from inefficient infrastructure and toward the platforms that can support growth, care redesign, workforce effectiveness, and long-term financial sustainability. It may also mean selective demolition on an established campus.
Mission-Essential but Low-Margin Services. Services such as behavioral health, pediatrics, obstetrics, addiction care, and other community-essential offerings often do not produce the same financial profile as higher-margin procedural or specialty services. Yet they may be central to the organization’s mission and market role. Sustaining them requires deliberate choices about subsidy, scale, partnerships, care model design, and the revenue-generating services that help support the broader continuum.
Control of the Care Continuum. Market essentiality increasingly depends on whether the organization can keep patients connected across the continuum, either through direct ownership or strong partnerships. Primary care, ambulatory access, diagnostics, pharmacy, post-acute relationships, virtual care, and specialty networks all influence whether patients stay in network and whether the system can leverage scale. The challenge is determining which capabilities must be owned, which can be partnered, and which can be centralized without weakening the patient relationship.
How to Decide What Deserves a ‘Yes’
The organizations that navigate this environment well will not simply cut capital or defer decisions. They will create a more rigorous bridge between strategy and execution. That bridge should begin with a clear test of strategic relevance: Is this investment aligned with the organization’s core strategy, and is it essential to the role the organization must play in its market?
If the answer is no, the decision should be straightforward. If the answer is yes, the harder questions begin:
- What is the minimum viable investment required to achieve the strategic objective?
- Can the organization achieve the same goal through consolidation, partnership, phased investment, or third-party capital?
- What are the downstream implications for utilization, staffing, reimbursement, access, physician alignment, and future flexibility?
- What existing asset, service, or capital request should be deprioritized to fund this priority?
- Does the investment strengthen the organization’s market essentiality, or simply preserve the status quo?
In this environment, capital strategy is no longer a budgeting exercise; it is the discipline that helps health systems decide which parts of the future they are willing to fund — and which parts of the past they can no longer afford to preserve.
© Copyright 2026. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC, its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.
