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What drives procedures out of the inpatient setting?

We used claims data to investigate how procedures shift out of the hospital setting to enable better predictions of site-of-care shift. With a better sense of how procedures shift, health care leaders can make more informed investment and partnership decisions.

The main takeaway: While the pace of outpatient shift remains slow, some procedures did shift rapidly out of the hospital. This rapid shift happens when regulatory and market forces align, emphasizing that hospitals can’t take their market share for granted, and payer, physician, and life science stakeholders can all play a role in accelerating the pace of shift.


Our analysis

We analyzed two national claims data sets, CMS’ Physician/Supplier Procedure Summary file and Optum’s de-identified Clinformatics® Data Mart Database, to explore how 27 procedures shifted across care settings between 2014 and 2019.

Want more detail on our findings and methodology? Check out our full piece on Understanding how procedures shift out of the inpatient setting.


Key takeaways
  • Regulatory change can trigger rapid shifts – sometimes in unexpected ways
  • Market forces dictate the pace of shift

What this means for you

While procedures tend to shift slowly across care settings, rapid shift can happen when regulatory and market forces align.

Stakeholders looking to maintain their share of procedure volumes should monitor local market forces to anticipate change. And stakeholders looking to spark shift to lower-cost care settings should take an active role in shaping the market forces that (along with regulation) enable and sustain outpatient shift.

  • Health system providers hold strong procedure market share despite regulatory changes, but this trend won’t necessarily continue indefinitely. To preserve current market share, systems need to incorporate freestanding ownership or partnership options into investment conversations.
  • Independent providers are driving volumes to the freestanding setting. To further capitalize on this trend, independent providers need to lead the market in offering consumer more access points for procedure care.
  • Payers have traditionally relied on payment incentives to drive volumes to the freestanding setting. But slow growth for most procedures shows that this lever isn’t enough. To accelerate the site-of-care shift, payers must preserve specialist independence and partner with operators to build the necessary infrastructure.
  • Suppliers and service providers have new potential clients in the form of physicians and ambulatory operators who can provide procedural care independent of hospital partners. When evaluating new capital investments, physicians and ambulatory providers are more likely to prioritize cost containment and throughout efficiency than traditional providers.

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