How Baylor Scott & White doubled income as hospital admissions fell

Although Baylor Scott & White Health saw its hospital admissions fall by 13,000 annually in the last two years, the Dallas-based health system grew its revenue by $1 billion and more than doubled its operating income to $725 million, according to The Dallas Morning News.

Despite the 5.5 percent decline in inpatient stays, the system was able to adapt by shifting a majority of visits to outpatient sites. 

Last year, Baylor Scott & White had 12 million visits to its outpatient care sites, 3.5 million more visits than in 2015, and had 50,000 more outpatient surgeries per year.

Last year, 63.1 percent of Baylor Scott & White's revenue came from outpatient visits.

Baylor Scott & White's CEO Jim Hinton told the publication this shift is intentional.

"Hospital inpatient stays are no longer the best barometer of healthcare activity," Mr. Hinton said. "We're going to need to rethink the measurements of success."

Mr. Hinton said that Baylor Scott & White has partnered with several companies, including  United Surgical Partners International and Touchstone Medical Imaging, to bolster its outpatient care operations.

Officials also have focused on value-based care initiatives to cut costs. This includes working to reduce hospital readmissions by offering primary care follow-ups and operating an ACO.

These changes have helped Baylor improve its operating margin from 3.2 percent in 2017 to 7.2 percent in 2019.

"We've taken a lot of costs out of the system," Mr. Hinton told the publication, "and then reinvested in digital capabilities and other venues."

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