TARA BANNOW January 07, 2020 04:40 PM
For the first time in 35 years, U.S. hospitals
delivered fewer outpatient visits in 2018 than in the prior year as the
competition to provide such care continues to intensify.
The American Hospital Association's newly
released 2020 Hospital Statistics report shows the 6,146 hospitals in the U.S.
delivered a cumulative 879.6 million outpatient visits in 2018, 0.09% less than
in 2017, when they delivered 880.5 million outpatient visits. The data, which
covers health system-owned ambulatory surgery centers, outpatient clinics and
urgent care clinics, is the first year-over-year decline since 1983, and comes
even as health systems work to expand their outpatient offerings beyond
hospital campuses.
The amount of outpatient care being delivered
nationwide is likely on the rise, it's just happening in more places than it
used to. The AHA's report, provided exclusively to Modern Healthcare ahead of
its public release, highlights the fact that patients are increasingly
gravitating toward the countless disruptors that tout more convenient, cheaper
options for primary care, urgent care and even emergency care. CVS Health, for
example, plans to launch 1,500 clinics with expanded services
in its stores by the end of 2021. And UnitedHealthcare recently began refusing to pay for certain outpatient
surgeries in hospital settings to save money.
"We're pivoting to a new business model in
healthcare, with a much more pluralistic delivery system with many, many more
consumer options," said Ken Kaufman, chairman of management consulting
firm Kaufman Hall. "Which, of course, is exactly the same thing that's
happening in other parts of the economy. I think it's very important that
especially the major health systems recognize this and realize they have to
compete against it."
The outpatient decline was specifically in the
number of emergency outpatient visits hospitals delivered in 2018, said Aaron
Wesolowski, the AHA's vice president of policy research, analytics and
strategy. Other areas of outpatient utilization were stable or up slightly over
2017, he said.
Patients who used to visit emergency departments
are now going to urgent care clinics or other settings that may or may not be
owned by health systems, Wesolowski said.
Kaufman said it's no different than what's
happening in the retail sector.
"In the old days, you had to get in your
car and drive around to a bunch of stores to see if you could find what you
wanted and you don't have to do that anymore," he said. "The same
thing is happening in healthcare. It's going to happen more."
Despite the lower number of visits, hospitals'
net outpatient revenue increased 4.5% year-over-year in 2018 on a cumulative
basis, even as net inpatient revenue rose 2.1%.
As in prior years, the newest AHA data show the
gap between outpatient and inpatient revenue continues to narrow. Hospitals'
net outpatient revenue—$494 billion—was 97% of net inpatient revenue—$508
billion—in 2018, compared with 95% in 2017 and 92% in 2016.
"I don't know that I can speculate as to
when they will converge, but the trend lines seem to be getting closer,"
Wesolowski said.
It may be that patients are going elsewhere for
primary care but that hosptials are still capturing the more acute services
that carry higher reimbursement, said Chad Mulvany, director of healthcare
financial practices, perspectives and analysis for the Healthcare Financial
Management Association.
"Maybe the trend toward convenience has
picked up, and so for all the very low-acuity stuff people are going to the
Minute Clinics of the world, and if it becomes more complex than that, they're
going to the hospital for a procedure," he said.
The continued pressure on hospitals' budgets
pushed profits down 5.2% year-over-year to $83.5 billion in 2018, compared with
$88 billion in 2017, which represented a massive, 12.5% jump over 2016.
Wesolowski said that's due to the same pressures
that have plagued hospitals for years: continued lower reimbursement from
public payers, the shift from inpatient to outpatient care and the increasing
costs of drugs and labor. A separate report provided by the AHA said Medicaid
paid hospital 89 cents for every dollar they spent delivering care to Medicaid
patients in 2018. For Medicare, that was 87 cents.
Total expenses at U.S. community hospitals
surpassed $1 trillion for the first time in 2018, up 4.6% year-over-year. AHA's
community hospitals definition excludes hospitals that are not accessible to
the public, including military and veteran hospitals, prison hospitals and
other specialty hospitals. Hospitals' total net revenue surpassed $1 trillion
for the second time in 2018.
The AHA also found that hospitals' spent $41.3
billion providing uncompensated care in 2018, or 4.1% of total expenses. That
number includes bad debt, unpaid bills hospitals expected would be paid, and
financial assistance to low-income patients. That's up from $38.4 billion in
both 2017 and 2016.
Wesolowski said the increase is likely due in
part to the Trump Administration's repeal of the Affordable Care Act's penalty
for not having health insurance and its new Medicaid eligibility policies, both
of which increased the number of people without health insurance.
CORRECTION: An earlier version of this story
misstated the percentage decline in 2018 outpatient visits, which were down
0.09% from 2017.
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