Most Health Systems Have a Priority Problem

After years on the inside running strategy at a health system, the pattern is consistent — and it’s not what most people assume.

By Annette Kenney

I spent years as a Chief Strategy Officer inside a major health system. Here’s what I learned: the strategy almost always looks great on paper. What’s broken is what happens before it — and what happens after.

The pattern is consistent. A leadership team agrees on a strategic plan. Service lines get prioritized. A three-year roadmap is approved. Then things go rogue: Marketing budgets are out of sync with growth targets. Workforce constraints stifle growth potential. “Pet projects” divert resources from approved priorities. The plan becomes disconnected from operational and capital budgeting processes. Ultimately, what looked so good on paper never actually happens—or it happens too slowly.

An effective health system growth strategy is extremely complicated. It requires many levers—and many stakeholders—working in concert to pull it off. The CMO has a view on which service lines deserve marketing investment. The COO and CNO have views on which ones have capacity constraints. The CFO has a view on contribution margin and financial potential. The CSO oversees the official plan — and has to reconcile all those views into a single set of decisions about where capital actually goes. Often, that reconciliation never happens through a coordinated process. Politics, disjointed budget cycles, and competing priorities get in the way. The result is a portfolio that looks balanced on paper but is, in fact, a series of compromises that don’t add up to a coherent growth thesis.

What is missing is alignment. Alignment requires three things that many systems overlook: a scoring framework everyone agrees on before the conversation about specific initiatives starts — quality performance, market demand, capital intensity, workforce and facility availability, payor mix, competitive position. Honest data against the framework, not directional or aspirational, but real. And a facilitator who can hold the room. Not an internal voice — internal voices are part of the politics.

When those three things exist, something changes. The strategic plan becomes an effective capital allocation instrument. The leadership team is aligned because the trade-offs were discussed transparently rather than through back-room negotiations. And the growth plan can actually be deployed because there’s a shared belief in its potential, a clear set of priorities underneath it, and the actual funding in place to make it happen.

Looking back, our greatest success didn’t come from more innovative ideas or better market analysis. It came from a structured process that could surface the priority conversation with my CEO, CFO, CMO, COO and CNO — and produce alignment we could all defend to the board.

That’s the work we do at Andersen Consulting Health. If you’re navigating this as a CSO, reach out to john.mckeever@andersenconsulting.com.