Hospitals are continuing to move care to outpatient settings, according to Strata Decision Technology analysis of first-half data from more than 2,000 hospitals and 149,000 providers. The shift means inpatient wards are increasingly reserved for sicker patients, while lower-acuity procedures go to outpatient departments.
The trend varies by service line. Gynecology procedures moved out of hospitals as minimally invasive options grew, while breast health saw more and sicker patients in the hospital, likely tied to increased testing and diagnoses. Vizient projects outpatient volumes will grow 20% over the next decade, compared with 7% for inpatient discharges.
Financially, the shift coincides with improving margins. Hospitals ended June with a 0.7% operating margin after starting the year negative, despite high drug and supply costs. Outpatient procedures can cost up to 50% less than inpatient ones, and payers are pushing to narrow the gap. CMS is phasing out its inpatient-only list—over 280 procedures removed this year, with full elimination planned by 2028—and Elevance Health recently announced lower reimbursement for off-campus departments.