For this report, we analyzed data from CMS’ Standard Analytical File (SAF). We studied inpatient Medicare claims data from 2019 and 2022 at the facility and subservice line level to see what the “new normal” of hospital volumes looks like. We then determined whether each subservice line was high or low revenue using Advisory Board's proprietary revenue benchmark data.

We separated services by inpatient and outpatient, recognizing that while inpatient services have higher hospital revenue, they also have a higher cost basis that reduces margins. Our goal was to identify volumes that result in positive hospital margin growth for, with revenue as the closest reliable proxy.

We calculated a median reimbursement rate for inpatient and outpatient services, at $18.3K and $1.8K, respectively. All subservice lines above median reimbursement benchmarks were considered high-revenue. For example, the following services fell into high and low-revenue categories.

Example high-revenue services

• Inpatient spine – spinal fusion 
• Inpatient general surgery – bariatrics 
• Outpatient cardiology – electrophysiology 
• Outpatient

Example low-revenue services

• Inpatient deliveries 
• Inpatient degenerative disorders 
• Outpatient electrophysiology

We then examined the percentage change in the number of total claims as well as the percentage change in the number of high-revenue and low-revenue claims for each facility. We then categorized how hospital volumes changed from 2019 to 2022 in each category.

All data in this report is based on Advisory Board analysis of CMS' Standard Analytical File.

Our analysis revealed that not all hospitals experienced lasting volume drops stretching into 2022. Moreover, the quality of volume changes varied across facilities. Of those hospitals that saw volumes grow, some grew high-revenue volumes disproportionately, while others saw increases in low-revenue volumes instead. The experience of each hospital fundamentally shapes the right strategy for growth going forward.