The Patient Protection and Affordable Care Act is driving a business model shift from inpatient care to outpatient and ambulatory care, according to a Fitch Ratings report.
Value-based payment models, risk-sharing arrangements and consumerism — all on the rise under the PPACA — favor providers delivering high-quality, low-cost services in the most convenient settings. Subsequently, from fiscal years 2010 to 2013, Fitch's rated hospital and health system portfolio showed a decline in inpatient activity, along with an increase in outpatient and ambulatory care.
This development necessitates a reassessment of how nonprofit hospital clinical performance should be measured, according to Fitch. However, inpatient, volume-based metrics are still "important indicators of market relevance and competitive position," the report states. Furthermore, inpatient admissions, surgical volume, emergency department visits, average length of stay and case mix index will have a notable impact on profitability.