Industry Trends: Inpatient is Out. Outpatient is In.

shutterstock_236830459Welcome to the first entry in our new MediRevv Industry Trends blog series. As the name suggests, Industry Trends is where we’ll periodically evaluate and share current directions in healthcare and how they might impact your organization. We hope you enjoy the series; here’s the installment #1.

INDUSTRY TRENDS:
INPATIENT IS OUT. OUTPATIENT IS IN.

At hospitals across the country, the proportion of inpatient service needs is declining, while outpatient volume is on the increase. This trend, the early stages of which were highlighted in a 2013 Modern Healthcare online article, cited several reasons for the change of direction, including, “the slow U.S. economic rebound; the continued rise of high-deductible insurance plans that constrain medical use; the growth in the number of patients who are held for observation instead of being admitted; and the reforms of payment and delivery models to better coordinate care, improve outcomes and lower costs.”

The article contended that the decrease in admissions was also “related to the U.S. healthcare system’s success stories, such as treating heart patients effectively without hospitalization.”

Flash forward: New data released this month by the Medicare Payment Advisory Commission (MedPAC) confirms that this trend has certainly continued. 

Several U.S. hospitals have recently closed their doors due to declining inpatient volumes, while others are seeking to avoid that fate by shifting their focus to outpatient services.

According to MedPAC:

  • 27 hospitals closed in 2013, many of which were struggling with occupancy rates as low as 32%
  • Mergers and acquisitions have increased 16% between 2012 and 2013, and hospitals struggling to adjust their finances to “the new realities of the healthcare delivery system” are prime targets
  • Two hundred and eighty-three hospitals were involved in M&A deals in the past two years

Rural hospitals are definitely the hardest hit, many unable to financially keep up with the costs of transitioning from inpatient service offerings to outpatient. Those that can make the shift and deliver quality outpatient care will be in good shape as we enter the new year.

As with so many aspects of this new healthcare landscape we find ourselves in, successfully transitioning to a focus on outpatient service offerings will require a healthy revenue cycle. We invite you to check out our blogs on that subject and get in touch if you think we can help you.

We’ll see you soon with more MediRevv Industry Trends.

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About Kent Smith, Vice President, Sales

Kent Smith, Vice President, Sales

Kent leads MediRevv’s new business sales initiatives and marketing and account management programs. He has built, from the ground up, a cohesive team of healthcare sales and marketing professionals who understand the critical aspects of any engagement: exceeding the expectations of and creating value for our clients; building enduring, mutually beneficial partnerships; and maintaining transparency and a high level of trust in our execution.

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