Hospital Use Forecast Reveals Future Facility Needs
The following is an excerpt from the Sg2 report High-Acuity Facilities of the Future: Redefining Hospital Demand. Sg2 members can read the full publication and view other facility planning resources in the Facility Planning Resource Kit on intel.sg2.com.
Sg2’s Impact of Change® forecast has correctly predicted falling inpatient discharges for years. At the time of orignal publication, the Sg2 forecast indicated discharges would continue to decrease—2% over the next decade—reflecting a dramatic decline in use rates. But “inpatient” refers to billing status, not overall hospital utilization. When it comes to predicting hospital facility needs for the future, inpatient discharges don’t tell the whole story.
Despite Declining Discharges, Hospital Use Will Increase
Many patients who are not billed for an inpatient stay actually do spend time in a hospital bed. In fact, when hospital outpatient (HOPD) and observation (obs) volumes are added to the inpatient forecast, the trend line for future volume growth changes direction.
Short-Stay, Low-Pay Patients Will Predominate
Currently the vast majority of hospital volumes—nearly 70%—are not inpatient discharges. Rather, they are far less lucrative HOPD visits and obs stays.
With volumes in both the HOPD and obs status expanding over the next 10 years, by 2027 just 28% of patients who occupy hospital beds will be billed at inpatient rates, and the HOPD will account for an even greater proportion of hospital use than it does today. Efficient use of HOPD space will be necessary to manage the increasing volume of same-day and next-day discharge procedures in the future. Likewise, protocols, processes and technologies that can rapidly and correctly diagnose, triage and discharge the growing population of obs patients will be critical.
Inpatients Get Sicker
Of course, despite the rise in HOPD and obs utilization, the inpatient core of the hospital will remain. But inpatients will be increasingly complex and critical—and, with the aging of the population, increasingly frail—requiring longer hospital stays and more intensive care.
Overall ALOS Will Rise
A significant shift to observation status has already taken place for many medical conditions, resulting in a higher-acuity inpatient population. HCUP data demonstrate this case mix shift, revealing a 2.5% increase in average length of stay, excluding obstetrics and those 17 and under, between 2011 and 2014. (Previously ALOS had been declining.) Sg2 projects this trend will continue, with ALOS rising another 2% over the next decade.
Critical Care Volumes Will Grow
In contrast to the overall inpatient forecast of –2%, the population of patients needing critical care will increase over the next 10 years. Advances in care for septicemia and spinal cord injury will drive down ALOS for these conditions, dampening the overall ALOS forecast for the selected critical conditions below. But discharges and days will both rise over the decade.
The Sg2 hospital forecast provides a national-level view of future hospital utilization, predicting discharges, obs volumes and HOPD visits. However, keep in mind that state- and market-level factors with potential to alter local dynamics also must be recognized, and that wildcards in the form of innovations and disrupters will significantly impact hospital utilization.
Sg2 recommends broad approaches to help extend the life of high-acuity facilities, some of which include controlling costs and adding value, accounting for technology, and becoming more consumer-centric.
Are you an Sg2 member? Learn more about facility planning by service line and our strategic approaches—and access a specific action plan—by reading High-Acuity Facilities of the Future: Redefining Hospital Demand in its entirety at intel.sg2.com. If you want to see the latest edition of the projections illustrated here, Sg2 members have access to the annually updated Impact of Change national demand forecast, which informed the statistics in this report. Sg2’s industry leading analytics platform can also illuminate these trends at a service area or zip code level, leading to an unprecedented level of insight into market dynamics. Reach out to your account team for help with your high-acuity facility strategy!
Not an Sg2 member yet? Sg2 has helped countless organizations identify and prioritize opportunities to leverage their hospital campus for strategic advantage. Contact us today to find out how we can help you.
Additional Sg2 insights on facility planning:
- Primary Care Access Ecosystem Remains in Flux
- Dig Deeper to Expose Volumes Susceptible to OP Procedure Shift
- Take a Performance-Based Approach to Facility Design