Hospital volumes expected to increase over the next decade

According to Kaufman Hall's latest National Hospital Flash Report, year-to-date ED visits per day increased by 4% between April 2023 and April 2024. At the same time, adjusted discharges also increased by 6%.

During the same period, hospitals' operating margins grew by 21%, in part due to these increases. However, Kaufman Hall also noted that higher volumes of ED visits, which reached pre-pandemic levels in April, are pressuring hospitals and health systems.

In a separate report from Sg2, a Vizient company, researchers estimated that inpatient utilization will increase by 3% and inpatient days will increase by 9% between 2024 and 2034. ED visits are also expected to grow by 4% during the same period.

Outpatient volumes are also expected to grow significantly during that same period, with Sg2 projecting a 17% increase. Robust growth is expected for both outpatient surgical services and chronic care needed to manage patients' ongoing health conditions.

Care is also expected to become more complex over the next decade. According to the Sg2 report, hospital-based high acuity and quaternary care is projected to grow by 13% and 18%, respectively. At the same time, hospital-based medium and low acuity care are expected to grow by 9% and 4%, respectively.

According to Modern Healthcare, this growth in complex care could negatively impact academic medical centers and hospitals that are referral centers for specialized procedures.

"The theme of academic medical centers and very high acuity level providers partnering with community hospitals will accelerate as the academics are near or at capacity," said Mark Pascaris, senior director at Fitch Ratings.

How will hospitals and patients be impacted?

As inpatient discharges and outpatient volumes grow over the next decade, the increased demand will put greater pressure on already constrained areas of care, including primary care and psychotherapy services, the Sg2 data showed.

However, inpatient capacity constraints are expected to decrease as more care moves to outpatient settings and as the average length of stay decreases. "Reducing length of stay is like free capital spending," Pascaris said. "The more you can reduce your length of stay, the [more] bed capacity you have and it lessens the need to expand."

According to the Sg2 report, 23% of evaluation and management visits will be delivered virtually by 2034, largely driven by a greater adoption of technological advances.

"You'll see more uptake in virtual services that are consultative in nature, think chronic disease," said Tori Richie, Sg2's senior consulting director for intelligence who led the report. "Anything that leans surgical, such as orthopedics or spine, will have less virtual uptake."

These virtual capabilities will also likely impact home health, which is projected to grow by 22% over the next decade. Since aging, high-acuity patients will require longer hospital stays, organizations will need to be intentional in how they plan their inpatient and outpatient service line strategies.

"How many bed days could care at home save?" Richie said. "What other capacity constraints could be relieved by a robust care at home offering? These are questions organizations should be asking to ensure resources are effectively deployed in a manner that achieves high quality outcomes for patients."

Advisory Board's related resources

For more insights into future hospital volume growth, check out these Advisory Board resources:

This expert insight outlines seven key factors that will shape inpatient and outpatient volumes in the coming years, including population changes, insurance changes, disease prevalence, and more. For predictions in the oncology, cardiovascular, or orthopedic service lines, you can check out these cheat sheets.

We also have a market scenario planner that allows you to customize projections for services patients in your market use based on five key growth drivers.

You can also check out these growth forecasts for specific service lines:

• Obstetrics growth forecast
• Diabetes and obesity care growth forecast
•  Oncology growth forecast
• General surgery service line outlook
• Women's health service line outlook
• Specialty care drivers of change

(Kacik, Modern Healthcare, 6/12; Lagasse, Healthcare Finance, 6/12)