Hospital Service Volumes Expected to Rebound, Survey Finds

Health system executives surveyed early this year are optimistic about service volumes despite ongoing uncertainty linked to the coronavirus pandemic.

Although hospital service volumes decreased significantly in 2020, health system leaders expect most service volumes to rebound by 2022, a new survey found.

Particularly during the early phase of the coronavirus pandemic, healthcare providers experienced sharp declines in service utilization. The drivers of reduced utilization included state restrictions on elective surgery to accommodate coronavirus patient surges and patients deferring care because they feared exposure to the virus in healthcare settings.

The new survey, which was conducted by New York-based McKinsey & Company from Jan. 17 to Feb. 5, collected information from 30 of the largest nonprofit and for-profit health systems in the country.

A surprising finding of the survey was significant optimism about the future despite continuing uncertainty linked to the pandemic, says Kyle Gibler, MD, MBA, a partner at McKinsey & Company.

"When we talk with clients, many are concerned about a slow recovery of volumes to pre-COVID levels. But in our survey, most health systems predicted a near-return to historical levels by the middle of 2021 for most clinical areas. Even emergency department volumes, which many health systems have publicly talked about potentially never returning to pre-COVID levels, were projected to fully return by 2022," he says.

The survey includes several key data points:

• Inpatient admissions: On average, hospitals surveyed experienced a more than 20% decrease in inpatient admissions from March to June 2020. Survey respondents reported that inpatient admissions rebounded by the end of 2020, ending the year at about 7% below 2019 levels. Survey respondents expected inpatient admissions to remain at 2019 baseline levels in early 2021, but they forecasted an increase of 7% to 8% in 2022 and 2023.
   
• ED visits: Hospitals surveyed experience about a 14% decrease in ED visits in 2020, and they expected to remain below pre-pandemic levels this year. Survey respondents expected ED visits to return to baseline by 2022 and to increase about 5% over 2019 baseline levels by 2023.
   
• Outpatient visits: Health systems surveyed experienced a more than 15% decrease in outpatient visits in 2020. They expect outpatient visits to rebound to baseline by the second quarter of this year and to increase about 7% above 2019 baseline levels by the end of this year.
   
• Surgical volume: On average, health systems surveyed experienced about a 14% decrease in operating room procedures in 2020, and they expect surgical volume to return to baseline by the third quarter of this year. Survey respondents expect OR procedures to increase about 8% above 2019 levels by 2022.

Interpreting the data

Last year's decrease in inpatient admissions was partially offset by higher acuity among hospitalized patients, says David Bueno, PhD, a partner at McKinsey & Company.

"What we saw was that the number of patients hospitalized over that period certainly decreased, but what we also saw was an increase in acuity. So, while there were fewer patients in the hospitals, the patients who were in the hospitals were sicker. If we look more recently in the last quarterly report, we see revenue per adjusted admission up in the range of 15% year-over-year. So, there was smaller volume but sicker volume. That certainly helped hospitals sustain themselves from a financial perspective," he says.

Lower ED volumes could be a long-term trend, Gibler says.

"While ED volumes are starting to recover in the most recent quarter, many health systems expect ED volumes to remain below historical baselines for a while if not indefinitely as lower acuity patients seek other channels of care such as urgent care, primary care offices, and virtual care visits. What we expect is for hospitals to change their channel strategy. They will likely decrease the size of their ED footprint and increase in-person access points in the community such as urgent care and primary care as well as adopt digital offerings to make care more convenient," he says.

In EDs, patient acuity has had a similar effect on emergency room visits as inpatient admissions, Gibler says. "While ED volumes have been down, the average acuity has been above historical levels over the past 12 months. So, there has been some natural offset of the decreased volume by seeing sicker patients coming through the ED."

Preventive care is likely to be a primary driver of increased demand for outpatient services, Bueno says.

"We have certainly seen an outpatient visit drop-off. One of the things that we are looking for in the future is as an increasing percentage of the population becomes vaccinated for COVID hopefully health systems will see the number of preventative care visits increase, which would increase the total number of outpatient visits," he says.

Health systems are taking three approaches to the decrease in surgical volumes, Gibler says.

• Some health systems are operating business as usual, with below historic volumes because they are taking whatever demand that they get. But they are not changing operations to accommodate any of the expected backlog of procedures such as knee replacements.
   
• Some health systems are changing their bread-and-butter clinical operations and making improvements such as fixing their turnover times and making other improvements that are known levers to improve operational performance.
   
• The bold approach is using the down time in 2020 and 2021 to completely rethink how health systems are running their ORs to accommodate volume increases after the pandemic passes, Gibler says. "They are redesigning their OR operations by using new digital tools to automate parts of the process and increase reliability. They are engaging patients in new ways to make sure that patients are not artificially deferring care longer than they need to. They are using analytics to better and more agilely match supply to demand. So, the health systems that are redesigning their OR operations will capture an outsized share of the backlog."

Related: Medicare Service Utilization Plummeted From March to May 2020, Report Shows