Ambulatory Revenues Grow as Inpatient Volumes Shrink

John Commins, September 23, 2013

The shift away from post-acute hospital-based procedures to ambulatory services, which lack high-cost infrastructures, is "the future of healthcare," according to one health system executive. Keys to revenue growth include economies of scale and joint ventures with physician groups and hospitals.

Ambulatory surgery centers will continue to record volume growth as hospital inpatient surgery volumes continue to shrink, a report from Moody's Investors Service shows.

Moody's senior analyst and vice president Ron Neysmith said in a new study this month that the lower costs for outpatient procedures in ambulatory settings are driving the transition away from hospital-centric care.

"Ambulatory service centers provide care without the high-cost infrastructures associated with hospitals," Neysmith said in prepared remarks. "More procedures can be done safely on an outpatient basis and outpatient facilities are reimbursed on average 57% of the hospital rate for similar procedures, so insurance payors, including Medicare, have increasingly been directing patients to lower-cost settings."

As a result, ambulatory service centers' same-store revenues have been growing in the low- to mid-single digits since 2007 while same-hospital inpatient surgeries have been flat (measured at a 0.22% annual decline) in the same period.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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