Declining Inpatient Projections Part 1 | FTI Consulting
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Declining inpatient projections, future health status and patient satisfaction...a three-legged stool or a three-headed monster?
Kerry Shannon provides insight into three critical issues pressuring the healthcare industry.
Series: Part 1 | Part 2 | Part 3


How are declining inpatient projections affecting providers?


The affect is wholly negative at this point. This is a real problem for providers because declines of 3% can mean the difference between them being profitable or not. The 8 – 15% declines predicted could mean failure for some hospitals.


What is causing these declines?


There are two main causes: fewer people are being admitted and lengths of stay are shorter. This is getting into the health status topic a little, but these three topics are very much interrelated.

Health status will not dramatically improve in the next generation. Obesity and modern lifestyles will continue to produce an unhealthy population.

Poor health status used to mean increased admissions, but not anymore. The financial incentives of admissions are going away. The industry is in transition and it’s all about cost avoidance now.

Lengths of stay are shorter because of both payer policies and technological advances. Unfortunately for the provider, the last day of a hospital stay typically has the lowest cost and is therefore the most profitable under many current payment systems. So, the time that’s being cut is the most profitable revenue stream for the provider.


So, what’s the answer?


Providers have to assume the declines are here to stay and develop legitimate growth strategies to be successful despite the declines. Unfortunately, there is no silver bullet. Their strategic approach should cater to the nuances of their true strengths, market and consumer/patient pool.


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