Health systems might want to hold off on expanding inpatient services during the next decade, and move more investments to ambulatory surgical centers and outpatient settings.
That's according to a new national report out that predicts where care will be delivered over the next decade. Inpatient discharge volumes overall will decline by 1% by 2029, while outpatient volumes will increase by 19%, and ambulatory surgical centers will see growth of 25% over the same time period. The report from market analytics and insight company Sg2—a Vizient subsidiary—adds to a growing collection of data showing that there will be more lower-acuity care delivered and it will be delivered outside of hospital walls.
In fact, 2017 data from the American Hospital Association showed a shrinking gap between outpatient and inpatient revenue as more patients elected to get care in cheaper outpatient settings, and some believe a flip is inevitable in the coming years. The AHA's 2019 Hospital Statistics report showed hospitals' net outpatient revenue in 2017—the year covered in that edition of the report—was $472 billion and inpatient revenue totaled nearly $498 billion.
The move away from inpatient care is being driven by a few factors. There are more innovations in medical technology that allows for less invasive procedures and therefore less of a need for all the bells and whistles a hospital provides. There's also been considerable growth in ambulatory surgery centers, partly due to financial backing from private equity firms.
"In many instances, hospitals are a little taken off guard by this because often it's physician driven," said Madeleine McDowell, principal and medical director for Sg2. "So if there are a group of orthopedic surgeons that are not employed by the hospital, they're [the hospital] at-risk—the point we always make with hospitals and health systems is, if you're not talking to your surgeons and your physicians about employment alignment, you should plan or be prepared that they're talking to private equity because private equity is really investing a lot in this space."
The shift will accelerate as CMS eventually allows all previously inpatient-only procedures to be done in other settings, and expands upon the things ASCs can do by the end of 2023.
"CMS is no longer taking the role of determining the safety requirements for where surgery should be performed—they want to they want to get out of that role," McDowell said, adding that its part of CMS' site neutrality effort.
Physicians' offices and clinics will also see growth in their practices of about 18% by 2029. That'll be due partly because of population growth, but also because procedures formerly done in hospitals, like cataract surgery and endovascular procedures, will move to these settings. The move away from hospitals doesn't just impact inpatient volumes, but all sorts of care.
"It becomes an entire gap in the system of care, my care continuum and you can lose the upstream and downstream volumes, like rehab and advanced imaging," McDowell said. "Our forecast tries to say, if you do redesign, which you should be doing, you're not going to need those beds, which are extremely expensive, so build them wisely," McDowell said.
Other findings include that emergency department volumes will increase by 5% overall, but less urgent visits will decline by 15%, meaning that there will be sicker patients utilizing the ED and often for chronic disease-related flareups. Behavioral health visits – including both substance abuse and mental health - will increase by almost a quarter. Visits for COVID-19 related diseases will also be factors for ED growth, including for conditions that are newly being linked like chronic kidney disease, asthma, acute respiratory failure and cardiovascular diseases. Visits for infectious disease and burns and wounds will decrease by more than a quarter.
In addition, skilled nursing facility volumes will decrease by 5% by 2029, and home care will increase by 15%.
