Hospitals shift care to Outpatient sites as patient demand rises

Hospitals are moving more care to Outpatient sites as patient demand and payer pressures push procedures out of expensive inpatient settings. The latest data, pulled from more than 2,000 hospitals and 149,000 providers, puts some near-term numbers behind hospitals' aggressive push toward Outpatient care. Health systems have invested heavily in Outpatient care to capitalize on growing patient sentiment and save some money. New technological innovations, like minimally invasive surgery, have made procedures cheaper to perform in Outpatient settings. Patients say they increasingly prefer getting procedures in more accessible facilities with lower out-of-pocket costs. Vizient, a company that provides data analytics, supply chain management, and consulting services to health systems, recently predicted Outpatient volumes would grow by a whopping 20% over the next decade, while inpatient discharges would rise by just 7%. As they pivot more to Outpatient care, health systems are also starting to see their margins grow. Overall operating margins inched into the positive after starting the year in the red. A Strata analysis found hospitals ended June with the highest operating margin of 0.7% despite inflated drug and supply costs. Payers have also sought to cash in on growing Outpatient demand to cut costs. Outpatient procedures can cost up to 50% less than the same service performed in an inpatient setting, research shows. The Centers for Medicare and Medicaid Services, a federal agency that administers Medicare and Medicaid, has led this charge by phasing out Medicare's inpatient-only list, a registry of procedures the agency deems as only safe and reimbursable in the inpatient setting. Over 280 procedures were eliminated from the list this year, with expectations to fully eliminate the list by 2028. Payers are fed up paying more to hospitals, and some have tried to equalize payments toward Outpatient settings against the wishes of hospitals. Elevance Health announced new billing policies earlier this month that will pay lower rates for services and tests delivered at off-campus departments.