Listen to the episode on a streaming platform by clicking one of the links below:

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• Sutter Health and Allina Health have signed a letter of intent to form a combined system with 39 hospitals and 18K aligned physicians.

  • The 1,500-mile gap between the systems raises questions about systemness and governance, but there are opportunities for synergy in technology innovation, IT, RCM, and purchasing.

  • Diversifying across state lines to form a system with national scale can help diversify policy and market risks.

• On a panel at HIMSS26, CMS administrator Mehmet Oz and other administration officials expressed interest in introducing AI agents to Medicare that could help beneficiaries find providers or select plans.

  • Seniors might not trust AI, but that might not matter if these services and recommendations are pushed on them.

  • Unlike patients, AI navigator agents might not care so much about nonprofit health systems’ brand halo. We’ve raised similar concerns in the past about navigator services for commercial plans like UnitedHealthcare’s Surest.

  • Greater use of AI to detect Medicare fraud could root out bad actors, but false positives could create operational and reputational headaches for providers and health systems inadvertently caught in the crossfire.

• More than 75 strategy team members from 49 health systems joined us at last month’s Strategy Catalyst Summit in Arlington, Va. For this edition’s Key Market Dive, we’re digging deeper into four of our favorite insights and highlights from the sessions.

  • New AI deployments are making a visible impact on key strategic challenges like physician burnout and revenue capture, but they’re also demanding an increasing share of IT and transformation budgets. Strategy teams need to take on big picture questions about governance and vendor selection and can’t simply leave this work up to their IT teams.

  • In a hands-on demo showcasing how platforms like ChatGPT and Claude can be used for strategy work, we saw a wide range of AI fluency among participants. As these tools become more and more capable, strategy teams looking to transform their systems’ AI prowess would be wise to lead by example.

  • In another session, attendees discussed how reframing service line rationalization as a distribution problem can generate more organizational buy-in and sharpen thinking.

  • Stress testing different hypothetical market and policy scenarios can help strategy teams move from a reactive mindset to a more proactive approach in their strategic planning.

• This week’s featured graphic compares responses to THMA’s annual CXO priorities survey across a variety of executive roles.

  • Compared to other roles, CSOs are less focused on revenue capture and more focused on strengthening the workforce.

  • Executives across nearly every role are increasing their focus on AI.

Listen to the episode on a streaming platform by clicking one of the links below:

• Listen on Spotify

• Listen on Apple Podcasts

We’ve just wrapped up our Strategy Catalyst Summit, where we had the pleasure of seeing more than 75 of our members in person for two days of networking and high-level strategic discussion. Stay tuned for a summary of our favorite insights in a future edition.

• The American Medical Association is replacing bundled maternity payments with a new set of itemized codes, a change that will shift reimbursement from cost-conscious delivery units to more comprehensive outpatient services.

  • Medicaid will likely adopt the changes first, impacting rural and safety-net providers. Many commercial plans might continue to use value-based bundled payments.

  • Redirecting reimbursement to OB specialists and supplemental services could improve the workforce pipeline in the long term, but the new codes will also create new administrative burdens for these providers.

• We’ve assembled an expert panel of health system strategy leaders to help set our research agenda and supplement our insights throughout the year. To introduce our CSO Advisory Council, we asked each of them to talk about “what keeps them up at night” in their role.

  • Answers included state and federal policy changes, the rapid pace of technological change, modernizing core platforms, and separating the signal from the noise.

• Our featured graphic showcases the results of a THMA survey that asked senior executives across a variety of roles about their health system’s access strategy.

  • The vast majority of systems are investing in telehealth and centralized scheduling. Fewer systems are investing in self-service portals, and less than half of systems say they’re modernizing contact centers—possibly due to cost constraints.

• This week’s research recap looks at our favorite insights from two recent case studies detailing how health systems can leverage consumer segmentation to achieve operating model discipline.

  • Behavioral research can often uncover critical gaps between clinical assumptions and real patient perspectives.

  • Turning consumer insights into differentiated service offerings can unlock new levels of operational efficiency and patient engagement.

  • Segmentation needs to be embedded in governance, infrastructure, and multi-year strategy to maximize effectiveness.