Care-Setting Shifts Indicate It’s Time to Determine “What Next?”

Care-Setting Shifts Indicate It’s Time to Determine “What Next?”

By Michael Shipley
Senior Product Manager

As more and more procedures are moving from inpatient (IP) to outpatient (OP) and ambulatory surgery centers (ASC), there’s a lot of industry focus on the trend - and rightly so, because the way we have to think about healthcare delivery is fundamentally changing. Blame CMS policy changes. Blame commercial payer strategy. Blame COVID for sending in-person volumes plummeting and making telehealth mainstream. Blame whoever or whatever you want, but one thing is clear: for acute-care providers to survive in a world where healthcare is increasingly delivered beyond the walls of a hospital, they are going to have to be strategic in determining where and how they grow to meet their market’s changing needs.

 

The Gist of the IP / OP / ASC Story

Stratasan recently partnered with Gist Healthcare to take a closer look at care-setting shifts over time for two specific orthopedic procedures: hip replacement and knee replacement. You can view the resulting infographic for all of the details (or listen to our podcast on the subject), but our data analysis yielded the following key takeaways:

  • Since 2017, high-volume orthopedic procedures, like knee and hip replacement, have gone from being almost entirely in-patient to majority out-patient or ASC.
  • While these care-setting shifts can be attributed in part to COVID, the major driver was a desire for cost savings by both payers and patients. (CMS policy change acted as a tipping point.)
  • Q4 2021 data indicates whether patients move to OP or ASC is often determined by payer type. In-patient orthopedic procedures are the most Medicare-reliant, while ASCs are mostly commercial.

The biggest takeaway for hospital and health system leaders: A once-reliable revenue stream is rapidly changing course, and not just in orthopedics. Shifts continue in a number of other areas, such as neurosurgery, cardiology, and GI - ASCs continue to siphon volume away from hospitals. Now is the time to determine “what next?”. For some, this may mean acquiring or partnering with ASCs, urgent cares, or ancillary service providers. For others, it may mean a renewed focus on physician alignment or preventing patient out-migration. Regardless of the specific strategies chosen, health care executives must realize their organization’s financial success is largely reliant on their planning success - and their planning success is reliant on a clear understanding of their market.

 

Begin with Broad, Deep Market-Specific Data

At Stratasan, our strategy experts recommend hospitals and health systems begin their future planning by digging into their market data, ideally a dataset that includes their own EMR / EHR data, state data, CMS data, and a broad swath of claims data. For trending, we especially like our All-Payer Claims Dataset, where users can view market-specific historical trends, slicing and dicing by things like geography and facility, and even segmenting into specific groups of CPT or ICD codes that they use to define their service lines. 

The next step is to forecast these changes into the future. Acute-care providers can build their own models, or Stratasan has a proprietary Projections methodology that helps determine not only what’s been happening, but also what’s most likely to happen in the future.

 

The Power of Data-Driven Forecasting

One of the things that makes Stratasan unique in its approach to projections is that our future forecasting models are entirely data driven. Many forecasts rely on “experts” to make predictions of the future. This was an approach some of my former colleagues and I experimented with in years past, before I came to Stratasan. What we found then, and what I still see in the industry, is that visionaries are great at forecasting what might happen, but not necessarily what will happen.

This is why I love the approach we use at Stratasan. When forecasting, we look at actual trends in historic data and weigh them carefully to make sure our model doesn’t get ahead of itself or factor in anomalies, like some of the situational shifts healthcare experienced as a result of COVID. 

Using 2020 as an example: We’re essentially weighting 2020 trends at zero and using 2021 post-peak COVID data to highlight persistent trends that are poised to continue into the future. Take telehealth: It was slowly gaining popularity pre-COVID and then its use skyrocketed at the height of the pandemic. More recently, its use has scaled back somewhat, but the data show it’s definitely not going away. Even as payers, providers, and patients continue to negotiate telehealth’s future, acute-care strategy and finance leaders have got to stay on top of the data or risk being blind-sided. 

While none of us knows what changes will come next (with telehealth or otherwise), like the Greek philosopher Heraclitus famously said, "Change is the only constant in life." Having the right data at your fingertips helps ensure you’re ready for whatever the future will bring.

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