Elective Surgeries Shifted from Inpatient to Outpatient Settings

Inpatient surgery utilization levels declined between 2019 and 2021, while utilization rates in outpatient settings increased, according to data from Cedar Gate Technologies.

The findings reflect anonymized claims data from 12 million commercial insurance members.

Surgery utilization rates at inpatient facilities decreased by 7.33 percent from 2019 to 2021. At the same time, utilization rates at non-inpatient facilities rose. Hospital outpatient surgery volumes were up by 3.1 percent, while utilization rates at ambulatory surgical centers (ASCs) increased by 10.26 percent.

Between March and April 2020, monthly surgeries dropped from around 175,000 to 70,000 per month. Volumes rebounded to pre-pandemic levels in June 2020, but most surgeries occurred in outpatient settings rather than inpatient ones.

Many patients skipped elective surgeries and avoided hospitals in 2020 and 2021 due to the COVID-19 pandemic. This led patients to seek alternative forms of care at hospital outpatient or ASC settings instead, when appropriate.

For example, patients who deferred a total knee arthroplasty may have sought less invasive treatment options, such as nonsurgical orthopedic care like physical therapy. According to Cedar Gate’s data, there was a 2.26 percent increase in orthopedic physical therapy, while elective surgery volumes fell.

“The pandemic accelerated a trend toward decreasing inpatient surgeries, and this shift is impacting hospital revenue in real-time. Experts increasingly agree that hospital inpatient surgery volume is unlikely to ever go back to pre-pandemic levels,” Rajiv Mahale, senior vice president and chief analytics product officer at Cedar Gate, said in the press release.

“Increases in outpatient and ASC surgical volumes, however, present an opportunity for value-based care delivery models by providing strong patient outcomes and lower costs.”

Less invasive technology offered in outpatient settings can minimize risks and recovery time, improving patient care and satisfaction and reducing costs.

Between July 2020 and June 2021, total knee arthroscopy costs were 22 percent lower at a hospital outpatient department or ASC, averaging a respective $24,020 and $23,895. In contrast, the average cost was $30,825 for the same procedure in a hospital inpatient setting.

An increase in outpatient volumes provided temporary relief to hospitals and health systems in a challenging year. For example, in March 2022, outpatient revenue increased by 16.1 percent month-over-month and 34.9 percent year-over-year.

Further, in November 2022, outpatient revenue was up by 10 percent compared to November 2021, while inpatient revenue remained flat. Leaning on outpatient services could help hospitals improve their margins and overcome financial challenges, Kaufman Hall researchers suggested.