The Decline of Inpatient Care

We recently wrote about this trend as one of the largest in the healthcare industry for 2018, but this decline has been observed since the 2008 recession. We wanted to understand the drivers of this trend and how it impacts the future of healthcare.

The Stats

  • The number of inpatient hospital facilities decreased by 6 percent and total inpatient hospital beds have dropped 47 percent from December 1990 to December 2014, according to the CMS.
  • Between 2005 and 2014, the inflation-adjusted mean cost per inpatient stay increased by 12.7 percent, from $9,500 to $10,900.
  • There was an average of 2,174 outpatient visits per 1,000 people in 2014, up from an average of 2,000 visits in 2007.
Infographic source: Frost & Sullivan

The Drivers

1. Patients want cheaper and more convenient care

As patients assume more of the cost of care, ambulatory settings are increasingly attractive. Patients find these settings more convenient, more efficient and less costly than inpatient treatment.

2. Pressure on hospitals to reduce readmissions

The Hospital Readmission Reduction Program (HRRP) was established in 2012 as part of the Affordable Care Act to help patients avoid unnecessary and avoidable hospital readmissions. This program, established in 2012 as part of the Affordable Care Act, penalizes hospitals financially if readmission rates for certain illnesses are higher than expected.

3.  New technology and treatment methods

As modern treatment methods are developed, the need for inpatient care is reduced. Hospital inpatient care has been falling as an increasing number of procedures can be performed at lower costs on an outpatient basis because of technological advances.

New technology has made virtual visits and telehealth more efficient and convenient than traditional medical care.

4. Emphasis on prevention, proactive care and population health

Pay for performance and risk-based contracting provide incentives for systems to invest in population health initiatives as well as preventative care.

How are hospitals responding?

Source: Advisory Board
  1. Better use of staff

Many organizations are accustomed to the fee-for-service environment, relying on a relatively straight-forward staffing structure centered on delivering support to physicians, who conduct the majority of patient-provider interactions.  The future is likely more decentralized, and more focused on population health, with nurses, PAs, care managers, social workers, behavioral health experts, and specialists all deeply involved in coordinating services and achieving goals for an individual patient.

Physicians will partner with patients in healthcare more than ever before. This will create an environment where physicians interact with patients as part of a connected care network.

Flexing, giving fewer hours to some workers, will become more common where necessary. Nurses will provide more care for patients and communities, such as in Nurse Managed Health Centers – NMHCs.

2. Digital solutions

mHealth. Mobile health applications enable nurses and patients to check on health care process on the go. More than 165,000 mobile health apps already exist. Applications will allow nurses to stay connected to patients post discharge via text, email and/or voice, and have the potential to reduce readmissions drastically. Other applications can help manage chronic diseases such as diabetes, cardiovascular disease, and epilepsy. Some m-health products may prove so effective that doctors begin to provide them by prescription.

3. Extending outside the hospital

Hospitals are increasingly turning to mergers, acquisitions, collaborations and partnerships with ambulatory care providers to have a consistent, integrated approach to managing populations while adjusting to consumerism. This enables hospitals to decongest emergency departments and reduce costs of care while increasing patient volumes by leveraging these ambulatory care centers as referral nodes.

More non-acute care will take place within the community, including at retail clinics, at home and through technology-enabled care such as telehealth and tech-enabled preventative care.

4. Chronic disease management strategies

Patients with one or more chronic conditions can seek care from the nearest retail clinic. Uninsured patients can access inexpensive care and insurers can incent patients to seek care in these facilities as opposed to primary care clinics.

5. Population health initiatives

Providers must work to understand their patient population and what prevalent risk factors are present. Providers can then identify their highest risk individuals and target appropriate proactive interventions as necessary. Depending on the population, targeting smoking cessation, diabetes, obesity or increasing vaccination rates as population health initiatives could lessen the cost of care and lead to reduced readmissions.


About the Author

Chelsea Youngquist brings 15 years of experience in sales and marketing to her role at Taylor Healthcare. She specializes in Healthcare, Life Sciences, Pharma, and Technology solutions. Holding various positions in the brand management, sales and product marketing fields gives Chelsea a broad perspective on partnering with Taylor’s clients to create growth and increase efficiency.

Chelsea Youngquist , Director of Marketing, has 4 post(s) at Healthcare Blog


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