Health System Portfolio Rationalization: The CFO's Framework for Growing Up Instead of Out

The nation's largest nonprofit health systems are divesting hospitals at the same moment for-profit systems are reshaping their portfolios. CommonSpirit Health transferred Trinity Health System to UPMC, sold a critical access hospital in North Dakota, and is in the process of selling three more. Community Health Systems is divesting nine hospitals across four states for more than $1.2 billion. This is not a distress story. It is a strategy story.

The question every health system CFO needs to answer right now is not "where can we grow?" It is "where should we invest?" Those are different questions, and they carry very different capital implications.