It's no secret that there is an ongoing shift from inpatient to outpatient medical procedures. These days, patients prefer to have their knee replacement surgeries, cataract surgeries, colonoscopies, and mammograms (to name a few) performed in the outpatient setting due to the associated ease, convenience, and price point.
Complex procedures and surgeries are now possible in outpatient facilities due to (1) a consolidating market (2) CMS payment reforms and (3) new medical technologies like hybrid operating rooms and minimally invasive surgeries.
Let's take a closer look:
1. Consolidating market
Over the past 10 years we've seen the healthcare market consolidate pretty significantly, particularly in the outpatient market. Hospitals, private equity firms, even insurers are quickly buying up outpatient facilities across the U.S. for several reasons:
- Population health: We are seeing providers, clinicians, and payors organizing themselves in ways where they can more effectively and jointly manage healthcare for broader populations, looking at outcomes and population health as a whole.
- Consumerism: Outpatient facilities are being purchased in response to a consumer need. These days, patients seek convenience, and prefer to receive care at a nearby facility. And, for a lot of patients, outpatient facilities are simply more accessible.
- Price: In a lot of ways, this shifting landscape helps reduce healthcare spending. Because services are often limited at ASCs and outpatient clinics, these facilities can charge less than hospitals, whose charges encompass operating costs of a wide breadth of services and staff.
Larger health systems and networks are also eager to acquire outpatient facilities because it helps keeps their patients in network and expands referral networks. And, many outpatient facilities also see these consolidations as mutually beneficial. With larger systems coming in to manage these smaller outpatient facilities, providers at outpatient facilities are freed up to do fewer administrative, financial operations, and reporting tasks and focus more on care delivery. The larger heath systems also expand outpatient budgets, which can result in shiny new equipment and technologies like EHR and telehealth systems.
2. New technologies and techniques
Outpatient care may be growing in popularity, but it is only possible because of technological advancements:
- Minimally-invasive surgery improvements: Ear, nose, and throat (ENT), heart, kidney, and orthopedic surgeries can be performed at outpatient facilities because of new, minimally-invasive surgery techniques. Outpatient surgeons create smaller incisions and use high-definition cameras to guide their techniques (and sometimes even work alongside robots that can assist with the procedures). Patients, in turn, see a reduction in costs, shorter recovery time, less pain and need for pain medications, reduced risk of contamination compared to open surgeries, and shorter hospitalization times.
- Hybrid operating room advancement: Who doesn't love a two for one deal? In outpatient settings, the hybrid operating rooms are set up in a way that allows patients to undergo two separate procedures under one round of anesthesia. In these expanding operating rooms, doctors can perform open surgery and minimally invasive procedures at the same time, which results in fewer labor needs, reduced costs, improved outcomes, and less time spent in recovery.
- Telehealth adoption: In particular, telehealth systems will prove to be very important in the outpatient setting. With home recovery after surgeries, doctors can check in virtually with patients (also referred to as post-surgical consulting). Beyond this, telehealth will prove to be particularly helpful in rural areas, improving access to specialists that may not exist in their areas.
- EHR systems: EHR systems help providers ensure the flow of data between inpatient and outpatient settings, keeping the patient record up-to-date. When providers have access to a patient's complete record, it can result in better patient management and improved care.
- Mobile health market: Mobile health apps and monitors help patients stay on track of their own health. They also help healthcare organizations manage healthcare more holistically by getting a broader picture of healthcare trends across the populations of people they serve. For patients, the most popular mobile health applications are:
- 25 percent: applications to access doctor (patient portals)
- 20 percent: track heart and blood circulation
- 19 percent: staying healthy/fitness apps
- 18 percent: diabetes tracker
- 17 percent: mental health apps
3. Payment reforms and reimbursement
ASCs are expected to receive a 2.1 percent increase in 2019 Medicare reimbursement on average per procedure. Similarly, hospital outpatient departments (HOPDs) will receive a 1.35 percent average rate increase in 2020.
Procedure codes continue to be added to CMS' payable/reimbursable list, which enables patients to seek more convenient care in surgery centers with the ease of mind to know that insurance covers the procedures. For instance, in 2018, CMS removed Total Knee Arthroplasty from its inpatient-only list. According to Definitive Healthcare data, the overall volume of TKA procedures increased by 8.14 percent from 2017 to 2018.
So, in other words, as soon as this procedure was reimbursable in an outpatient setting patients started selecting these facilities for their procedures. Outpatient TKA market share increased by 88 percent in that time, and inpatient share decreased by 4.5 percent. Overwhelmingly, we are seeing a trend in an increase across the states. Texas had a 182 percent increase in TKA volume, followed by Kentucky at 144.7 percent, Illinois at 133.5 percent. Only Massachusetts, Rhode Island, Kansas, and Arkansas had a net decrease in outpatient TKA share from 2017 to 2018.
Want to stay abreast of the rapidly-consolidating U.S. outpatient market (clinics, ASCs, and imaging centers)? Interested in learning more about how payment reforms, technology advancement, and patient sentiment are driving change in the outpatient market? Definitive Healthcare's platform can help you:
- Identify ideal selling opportunities in the large ambulatory care market across 1.6 million allied health professionals
- Understand how traditionally inpatient acute care environments, including cardiology, orthopedics, gynecology, and advanced dermatology, among other practice areas, are shifting
- Target and reach out to the key physician influencers across multiple outpatient facilities and networks
- And much more!
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