Steadily rising costs, increased competition, and employee and customer dissatisfaction have prompted hospitals to turn to a variety of traditional approaches to improving operations and performance. Extensive diagnostic analyses conducted in several hospitals have led Booz, Allen to conclude that these traditional approaches fall significantly short of providing lasting, substantial operations and performance improvement. As a result of these analyses, Booz, Allen has developed a new operational strategy known as the Patient-Focused Hospital. Implementation of this strategy at pilot sites has proven that it can improve significantly service performance as well as customer and employee satisfaction and reduce hospital operating costs. This article identifies the circumstance that gave birth to the Patient-Focused Hospital concept and describes how it works. The article also discusses the implications of patient-focused operations within the hospital industry and predicts that hospitals that adopt this strategy now will be the leaders of the future.