The Growth Channel

Unsure about the risk outpatient shift poses for your organization? Here's how to tell!

by Austin Terry and Lauren Lawton

One of the largest disruptors in health care in the last few years has been the shift of traditionally inpatient care to outpatient settings. While inpatient care has historically generated a majority of hospital revenue, this fact is quickly changing, with outpatient revenue now at 95% of its inpatient counterpart.

Assess your organization’s risk of outpatient shift with our Outpatient Shift Estimator

As outpatient care comprises a larger share of revenue and volumes, organizations need to understand the risk posed to them by outpatient shift. What's more, with reimbursement in the ambulatory surgical center (ASC) and hospital outpatient department (HOPD) settings significantly less than inpatient, organizations dependent on inpatient revenue are especially threatened by outpatient shift. To determine the risk posed to your organization by outpatient shift, you must determine the likelihood of a given procedure shifting out of the inpatient setting and the impact this shift will have on your organization.

Determining the risk of a given procedure shifting outpatient

There are a number of factors to consider when determining how likely an inpatient procedure is to shift outpatient:

  • Clinical feasibility: Consider if a procedure can feasibly be performed outpatient. Specifically, weigh whether a procedure can be safely and effectively performed in an outpatient setting and if there are any innovations on the horizon that will enable the shift of new procedures. Keeping track of clinical trials for a specific service, as well as FDA approvals for new treatments, can aid in predicting which service may shift.

  • Regulations: Weigh regulatory changes, including CMS approvals for an inpatient procedure to be performed in the HOPD and ASC. While CMS regulations apply at a broader national level, specific state regulations, such as certificate of need requirements, can also influence the level of projected outpatient shift.

  • Physician readiness: Consider physician readiness, weighing the willingness of surgeons at the organization and in the market to perform a given procedure outpatient. This can be determined both in conversations with the physicians themselves, but also through tracking physician volumes by site to determine their current level of comfort in delivering outpatient care.

  • Payment: Determine if payers in the market are helping push a procedure outpatient through mechanisms such as denying reimbursement for inpatient procedures for certain types of patients. By analyzing which procedures have been given pre-authorization requirements for inpatient care, organizations can gain insights into whether payers are pushing care outpatient.

  • Patient preferences: Finally, examine whether patients in a chosen market prefer a certain site of care and act on those preferences. This can be estimated by analyzing patient travel patterns and reaction to wait times as a means of determining if consumers prefer more convenient outpatient sites.

Determine the impact to your organization

Once you've identified procedures that are risk of shifting to the outpatient setting, the next step is to predict the impact of outpatient shift on your organization. First, how much of your current inpatient business is predicted to shift to the outpatient setting? To help with this task, our team has developed the Outpatient Shift Estimator, which allows members to the input their own inpatient volumes and estimate their risk of shift.

Next, estimate the potential revenue loss from the shift of care. Not only will you need to estimate the differences in reimbursement between the inpatient and outpatient setting, but you must also estimate whether or not you will be able to capture all of the procedures shifting outpatient.

Finally, determine how much excess capacity will be created from outpatient shift and whether you will be able to backfill that capacity. If not, will you be able to make up the difference in reimbursement through another means or will you need to downsize and cut costs?

 

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Here are 2 key lessons from 10 years of outpatient shift data

Most organizations are concerned about outpatient shift, but they don't have insight into the timing, trajectory, and driving forces.

Here are two key lessons—distilled from a decade of outpatient shift data—to ensure your outpatient strategy is built on solid, evidence-based information.

Get the Insight