Vivek Shukla wrote an article titled To Centralize or not to – A Classic Dilemma for Hospital CEOs (Sept 2026).
« As hospital groups grow, deciding what to centralize and what to keep local becomes critical. While centralization drives scale, standardization, and cost efficiency, decentralization enables agility and stronger local responsiveness. A practical 5-Lens Approach can help healthcare leaders strike the right balance—improving efficiency without compromising patient experience, local competitiveness, or accountability. The key question: Does this function get better with repetition—or with closeness? »
« Lens 1: Does Scale Make Things Better? … The most apparent example is procurement. Negotiating strength at the group level makes prices better for drugs, supplies, and equipment. In the same way, aggregation helps platforms for insurance contracts, IT infrastructure, revenue cycle analytics, and supply chains. Centralization adds value where repetition makes leverage, accuracy, or productivity better. If it enhances overall efficiency and has an advantage of economies, you are better off centralizing.
The only thing that should offset the benefit is a negative impact on patient experience or outcomes. In that case, you want to keep things decentralized. »
« Lens 2: Is Success Based on Local Context? … So anything that takes away local competitiveness of the hospitals needs to be kept decentralized. »
« Lens 3: Is the Work Based on Transactions or Judgements? … Transactional activities are more likely to succeed if centralized. When it comes to activities that include judgements and evaluations, it is best advised to keep them with the hospitals. »
« Lens 4: Does variability provide value or risk? Centralization provides standardization. Decentralizing things creates variability. Not all variability is detrimental. Some variation drives innovation and responsiveness to the market. Flexibility can provide agility and speed. Sometimes rigidity can put your health and finances in danger. Uniformity is good for clinical protocols, safety standards, infection control practices, and brand positioning. »
« Lens 5: How Close Is the Function to the Person? Here is the best practice – centralization usually helps functions that are closest to the balance sheet. Local ownership [decentralization] is usually needed for functions that are closest to the patient experience. »
« In many cases a hybrid approach can work wonderfully well. »
