One of the fastest-growing and highest-margin segments of the healthcare industry is ambulatory care. With consumerism, policy and new technologies driving growth, significant opportunities remain and health systems will need to continue investing in this space. Leaders must evolve their continuum of care, focusing on population health and value-based services, with an emphasis on primary care, virtual health, and ambulatory models of care to complement their acute care operations.
Over the last several years, consumer voices are being heard about where and when they want to receive their health care. With new and emerging technologies and evolving clinical practice patterns to ambulatory care centers, patients do not want to seek their care in traditional hospital environments. Providers are able to deliver quality care safely, effectively, and efficiently in these ambulatory settings including physician offices, virtual and telehealth systems as well as imaging and ambulatory surgery centers. These environments of care typically offer greater and more convenient access to the patients on an outpatient basis with a shorter stay and at a lower cost to the patient. Healthcare organizations must be ready to meet the patients when and where they want to be seen, or risk having them go to other providers that are offering more consumer-friendly ambulatory care services.
Reimbursement and payment reform
Growth in value-based care and at-risk contracting is creating incentives and driving both payors and providers to shift to the lowest cost of care setting. Shifting from a traditional well-defined fee-for-service economy to a system where value is defined by health outcomes, new players are emerging, and former competitors must align with the new normal. Also, new procedure codes continue to be added to CMS' outpatient reimbursable list, allowing patients to choose more convenient care in the ASC setting. Not only are ASCs experiencing clinical case growth, but the reimbursement gap is narrowing between ASCs and hospital outpatient departments with average reimbursement per procedure increase at ASCs trending greater than 2% this year compared to an HOPD increase of around 1%. Leaders must develop ambulatory strategies to meet this transformative environment.
New and Emerging Technologies
While Covid-19 has accelerated the demand for additional sites of care, ambulatory growth is only possible because of new and emerging technologies. Advanced imaging, virtual and remote care, minimally invasive surgery advancements and the mobile health market are just a few technologies sparking the shift out of the hospital. These advancements are also driving down the cost of care, a result not overlooked by the patient. While the IP setting is still the largest segment of the healthcare industry, growth is expected to be disproportionally in the ambulatory setting. As the strategic importance of the ambulatory segment escalates, transformational agility will be the new requirement for success.
The healthcare market has experienced significant consolidation in the past 10 years. The consolidation momentum has particularly impacted the outpatient setting with many physician groups and private equity firms entering the industry, quickly consolidating and acquiring outpatient facilities all across the country, directly competing with hospitals and health systems. Larger health systems and networks are seeing the need to develop and acquire outpatient facilities to keep their patients in network and expand their referral base. This consolidation provides a mutually beneficial situation for both the patient and provider in terms of efficiency, cost savings and convenience. A key component of a health system's strategies must address their opportunities for both organic and inorganic growth, focusing on consolidations, acquisitions, partnerships, and affiliations as well as their network of care design to support their ambulatory and population health strategies.
Pursuing the right growth and optimization strategies is critical for hospitals and health systems. Growth strategies must be both aligned to an organization's mission and provide a return to support the long-term optimization of resources. Developing a holistic approach to thrive amid the challenges of the external markets and internal cultural demands requires a nimble and agile strategic direction that balances the long-term vision of your organization and current demands of the healthcare market.