Is Less More? Behind the Trend toward Lower Inpatient Volumes | HAP Blog

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Is Less More? Behind the Trend toward Lower Inpatient Volumes

December 30, 2013 | By: Guest Blogger

Is Less More? Behind the Trend toward Lower Inpatient Volumes

A Chinese folk tale tells of the farmer whose horse ran away (bad luck), but later returned home bringing along a herd of wild horses (good luck). While taming one of the wild horses, the farmer’s son broke his leg (bad luck) – but the injury exempted him from conscription into the military (good luck) – and so on …

Like the events that befell the farmer, the downward trend in hospital utilization can be seen as both positive and negative for consumers, patients, and the hospitals that serve them.

16 Percent Fewer Patient Days per Month

This much is clear: hospital stays and days are down. For hospitals in the five-county region of southeastern Pennsylvania, total inpatient hospital days per month have decreased 16 percent over the past five years.*

The broad health care community— consumer advocates, insurers, hospitals and other providers, government and other policy makers—is pursuing the common goal of changing the U.S. health caresystem from sick care to well care. We are increasing the focus on routine checkups, preventive care, and better patient outcomes. We seek to improve overall health, reduce the need for intensive, expensive health care—including hospitalizations—and contain per capita health care spending.

Hospitals and physicians have been working hard to improve chronic disease care, prevent unnecessary readmissions, and keep patients healthy enough to stay out of the hospital. So lower inpatient volumes are good, right?

Unfortunately, some of the other factors driving the downward trend are more negative than positive. Due to the great recession and its aftermath, many patients continue to put off elective surgeries, behavioral health care, and other medical treatment. Forgoing needed health care lowers utilization without improving our nation’s health.

Observation Cases Up 50 Percent

The dramatic rise in observation services—up nearly 50 percent over the past several years—has, for better and worse, also contributed to the downward trend in inpatient volume. 

When used as intended, observation-level care can prevent unnecessary admissions. By keeping emergency department patients in the hospital a bit longer, for further observation and diagnostics onan outpatient basis, doctors can identify who can safely go home and who must be admitted. So observation can lower hospital utilization in a good way.

Unfortunately, a significant part of the growth in observation has little to do with good stewardship of health care resources. Several years ago, the hospital community noticed that many short hospital stays were being re-classified by insurers as observation-level care—a trend that continues today. 

These downgrades from inpatient to observation-level care represent what amounts to a false positive in lowering hospital utilization. The hospitalizations still take place. Patients still receive needed inpatient care. Utilization is reduced in name—and payment—only. Patients are at risk for unexpected co-pays and other financial obligations. Hospitals are hurt financially when they are paid much lower observation rates for the inpatient care that was needed and has been provided. 

The Right Trend, Regardless?

As leader of the region’s hospital association, I’ve been privileged to engage with hospital leaders as they guide their organizations in the transformation of health care. If hospitals were airlines, it would be like changing the wings on the airplane while in flight.

These leaders see less reliance on inpatient care as what needs to happen. They see investment in initiatives and services to improve the health of their community as what needs to be done. They ask only that hospital payment for needed health care and hospitalization be adequate, equitable, and predictable as they work to better serve patients and communities.

*Source: Delaware Valley Healthcare Council of HAP, Utilization Data Base 




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