Falling inpatient volume forces hospitals to adapt

Ambulatory care, technology updates offer challenges to execs

September 10. 2012 5:25AM - Last modified: September 10. 2012 5:28AM


Inpatient admissions will fluctuate for a hospital year to year, but the evolution of health care delivery has caused New Jersey's inpatient volume to decrease steadily. That's left hospital executives scrambling to find new ways to bring in patients.

Sean Hopkins, senior vice president of economics for the New Jersey Hospital Association, said the development of technology, such as noninvasive surgery, and the emergence of ambulatory care have caused more patients to seek outpatient care over the past few years.


"It's something we're aware of," Hopkins said. "This is definitely a trend that has been evolving for a long time."
Based on 2010 and 2011 admission numbers reported by the hospitals to NJBIZ, at least six hospitals in the state saw inpatient admissions drop by more than 10 percent year-over-year, though two hospitals saw year-over-year inpatient gains of 10 percent or more.


Derek DeLia, an associate research professor for health care at the Rutgers Center for State Health Policy, said the health care reform legislation has "kicked into high gear" the need for hospitals to adjust their inpatient and outpatient services.


"Health reform crystallized what we need to do in this area," DeLia said, adding that the government is now supplying tools and incentives — and penalties — to encourage hospitals to reduce inpatient admissions.


At Our Lady of Lourdes Medical Center, a focus on moving cardiology services to outpatient care has been one of the recent drivers of the decrease in admissions.

The Camden hospital saw a decrease in inpatient admissions of nearly 11 percent from 2010 to 2011.


"A lot of that was driven by the changes in cardiology, where the patients were now being seen on a same-day basis or outpatient," said Kim Barnes, Lourdes' vice president of planning and development.


"Twenty years ago they would have to crack your chest to go do something — now, they can do it arthroscopic," Hopkins said. "It would've required a three-day stay, and now, they can send you home on the same day. Care is changing rapidly, technology is changing rapidly, and the hospitals are trying to modify their service areas."


Also helping lower admission statistics is the growth of the observation patient status, which has become popular with insurers and patients, but not necessarily with hospitals.


"In a lot of cases, you're expending the same resources … but you're getting paid less for that," said Barnes, who called the difference in reimbursement for an observation — which can last up to 23 hours — and an inpatient admission "significant."


Inpatient admissions have traditionally accounted for a large part of a hospital's revenue, but as more patients are seen in an ambulatory setting, adjustments are becoming necessary.


"In this environment, you have to be more agile," Barnes said. "You have to flex the staff up and down based on the volume. … We try to have a lot more part-time or per-diem people, so that gives you a little bit more flexibility in staffing."


"Some hospitals are going to survive well," DeLia said. "They're going to make the pivot and re-engineer … and somewhere, there's going to be capacity that's not needed, and there will be a continued downsizing."


At Capital Health's hospitals, Larry DiSanto, chief operating officer, said the traditional mix of revenue of roughly 75 percent inpatient has nearly evened itself between inpatient and outpatient services. To recapture some of the lost revenue accompanying such a shift, Capital added higher-level inpatient services, like neuroscience and plastic surgery, that had been unavailable in the region.


"We're receiving transfers from about 50 different hospitals from around the region, both in New Jersey and out of state, because of its comprehensive services," DiSanto said about the neuroscience department. "We've seen a steady influx of people coming into Capital Health."


The system has also expanded outpatient services to balance patient volume. The strategy has worked so far for Capital — DiSanto said the Regional Medical Center, in Trenton, is on pace to admit 2,000 more inpatients than 2011, when there was a 10 percent increase over 2010.


The new Hopewell facility also is expected to exceed its Mercer predecessor's admissions by 1,200 this year.
"Does the building have something to do with that? I would think somewhat, but in our opinion, it's more the services that are in building," DiSanto said. "We've been continuing to add services here … we continue to identify needs of the community here and what we can provide here, instead of patients going elsewhere."


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