Interim Physicians Blog

Dr. Ken’s Corner: Hospital Admissions Stall As Outpatient Services Soar

Posted by Ken Teufel M.D. on Oct 26, 2017 11:38:53 AM

emergency-1137137_1280-1.jpgThe shift from inpatient care to outpatient care is the new normal, and hospitals are being forced to deal with the bottom-line consequences.  Hospital beds are being replaced by thousands of ambulatory surgery centers, free-standing emergency rooms, and urgent-care centers.  “In the early 1990s, outpatient care accounted for only 10% to 15% of hospital revenue.  Today, that figure is closer to 60%” (modern healthcare.com).

What were previously considered hospital-based, inpatient procedures are now often “day surgeries.”  Almost half of all mastectomies are now done as outpatient procedures—no hospital admission or overnight stay required.  Outpatient hysterectomies have undergone the most dramatic shift, increasing from 36% in 2010 to 64% in 2014, according to Blue Cross Blue Shield.  During the same time period, outpatient spine surgery grew from 61% to 82%, and half of all balloon angioplasties are now done as outpatients.  Studies show that safety and clinical outcomes are as good or better with outpatient surgery compared to inpatient surgery.

As inpatient care shifts to outpatient settings, hospital investments are shifting as well.  “Giant U.S. hospital operators, including Tenet Healthcare, Dignity Health and HCA Healthcare, are investing heavily in surgery centers, emergency rooms and urgent-care clinics located outside hospitals, chasing after patients who increasingly want cheaper and more convenient care” (The Wall Street Journal, 9/25/2017).

Becker’s Healthcare (2/8/2017) sees trouble ahead for hospitals that are unable to dominate both the inpatient and outpatient markets within their geographic territory.  “Hospitals can’t reduce capacity easily” and “at the same time they are seeing higher labor costs and the labor costs are hard to reduce.”  The successful hospital  CEOs will be the ones who are able to rapidly invest in outpatient facilities before the competition does.

Hospitals will no longer be able to depend on inpatient volumes to grow their revenue.  Instead, they will be forced to create totally new models of care delivery, according to a recent report from consulting firm Frost and Sullivan: “With a 5% reduction in the hospitals’ inpatient volume and an anticipated 21% increase in revenue from ambulatory care, hospitals [will have to collaborate] with other care providers to provide affordable and high-quality care to patients.”  Instead of hospitals being stand-alone profit centers, the new focus is on integrated care and services provided by a broad spectrum of providers.

With the shift from inpatient care to outpatient care, hospitals are finding new ways to staff their facilities. Some physicians are working exclusively in hospital-owned outpatient centers while hospitalists take over when patients are admitted.  Locum tenens physicians will continue to be a major resource for providing high-quality patient care in both inpatient and outpatient settings.

Topics: Dr. Ken's Corner