Procedure Shift to Non-Hospital Settings Puts Hospital Revenues at Risk

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The Advisory Board predicts that about one-third of outpatient hospital revenue could shift to freestanding facilities in the next few years, putting millions of dollars in revenue at risk for hospitals. Its report breaks down metrics by subspecialty and geography.

About a third of hospital outpatient revenue and 18% of volume is at risk of shifting to non-hospital sites, such as freestanding ambulatory surgical centers (ASCs) and office-based laboratories (OBLs), with nearly 20% of at-risk revenue in the early stages of this transition, 10% in intermediate stages, and 5% in an advanced or mature stage, with little opportunity for more change, according to a report published earlier this year by Advisory Board, a healthcare systems consulting firm.

Some 30 subservice lines (out of 174 subservice lines tracked by Advisory Board) have the potential to migrate from the HOPD (hospital outpatient department) setting to freestanding facilities in the next few years, with the greatest transitions occurring in orthopedics, radiology, and cardiology, the report says. The number of ASCs in the US grew by 7.1% between 2016 and 2020, compared with 1.75% for hospital outpatient departments, according to Advisory Board—noting that those growth rates vary highly by geography.


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