In addition to fostering patient loyalty and brand preference, performing more procedures in an ambulatory setting also brings down the overall cost of care as providers "become exquisitely efficient," says one health system executive.
Hospitals and health systems have been feeling the revenue pinch from declining inpatient volumes for years, and the situation is only going to get worse as healthcare reform continues to drive patients to lower cost care sites.
In order to offset this financial pressure, senior leaders are putting more emphasis than ever on efforts to grow their outpatient business. In HealthLeaders Media's recent intelligence report, "Ambulatory & Outpatient Care: A Market-Driven Approach for Success," respondents cited expanding market share (61%) and improving cost control (55%) as the top two factors behind their organizations' ambulatory and outpatient care strategy.
The movement away from inpatient volume requires a new set of strategic priorities that fully encompass outpatient care, says Lydia Hammer, senior vice president, marketing and business development at Main Line Health, a 1,295-bed health system with $1.4 billion in annual operating revenue based in Bryn Mawr, PA.
"The whole economic foundation has changed, and we are going to get paid for keeping people healthy and out of the hospital. Although, historically, we've been in the hospital business… we have evolved very much to thinking about ourselves now as being in the business of health, and that is an intentional evolution. We want to expand the reach of Main Line Health across the community," Hammer says.
A New Definition of Market Share
While she agrees that growing market share is an important objective, Hammer says she defines the term differently now than she has in the past.
"I think of market share now as patient loyalty and brand preference. I am no longer just counting heads in beds. It isn't about market share in the traditional inpatient setting anymore. It's become about providing access to our patients in the most convenient setting possible. It's about building relationships with patients and giving them the level of care that they need to keep them healthy and keep them engaged in their own care," she says.
"Historically, market share was the percentage of inpatients your hospital had compared to all inpatients in the region. We still want to provide inpatient care to everyone who needs it, but we are not only looking at that when we think of market share… We also want patients to come to Main Line Health for primary care and ambulatory care."
Last year, Main Line Health had 60,000 inpatient discharges compared with 1.2 million outpatient visits, 166,000 emergency department visits, and 225,000 home care visits, Hammer reports.
"The number of patients we touch on the inpatient side compared to the number of patients we touch on the outpatient side means we better be providing a good outpatient experience and meeting patients where they are and their expectations around access and ease of doing business with us," she says.
To create more access and to meet patient demand for convenience, the organization opened its Main Line Health Center at the Exton Square Mall in the Philadelphia suburbs in January 2014. The 32,000-square-foot health center offers primary and specialty care along with ancillary services, including laboratory, imaging, and radiology services in a setting that offers evening and weekend hours and complimentary valet parking.
"Our strategic team here is very much committed to spending more dollars in the coming budget year on ambulatory and outpatient initiatives. Last year, we opened the Exton Square Mall, and this year we are planning on another major outpatient center designed around wellness and fitness," Hammer says.
"We want it to be that when people do need to come into the hospital, they will come to Main Line Health because they have an existing relationship with us."
The Law of Volume
In addition to expanding market share, Hammer says performing more procedures in an ambulatory setting also brings down the overall cost of care—something most provider organizations are striving to do as payment models become more value-oriented.
"Patients not needing to go into the hospital for many of these procedural interventions or to access physicians means we can also provide care at a lower cost. The hospital by definition is an expensive place to provide care because it has to contain very expensive technologies and human resources. They have to be here to take care of people who need complex surgical interventions, and an enormous infrastructure is created that gets shared by every patient who gets care here," she says.
"However, in an ambulatory surgery center, for example, everyone in that building is an expert at doing a range of procedures that can appropriately be done without an inpatient stay. It's the law of volume and its relationship to quality. Because these physicians focus on a limited set of medical issues, they become exquisitely efficient and have the know-how to save time and money while also getting outstanding outcomes."
As more patients gain their healthcare coverage through health plans with a high self-pay obligation, it will become increasingly essential for providers to find ways to reduce costs, Hammer adds.
"Providing low-cost care is important as more patients are having to pay more out-of-pocket because of high-deductible health plans. People are buying low premium plans with high patient financial responsibility so the cost of care will matter more to the patient."
While reducing expenses is a central goal in Main Line Health's strategic planning around its outpatient and ambulatory care sites, Hammer notes that quality and safety are paramount.
"We think through very carefully how to make the best investments in our community," she says. "Like every healthcare organization, we have limited dollars to spend, but we also want to make sure that we are never sacrificing quality or patient safety."