US hospitals see weaker volumes of less acute patients in Q1

Organic inpatient growth is declining in U.S. hospitals, according to a report from Fitch Ratings.

A segment of the largest Fitch-rated U.S. for-profit hospital companies reported an average of 0.2 percent organic growth in inpatient admissions and 2.8 percent organic growth in admissions adjusted for outpatient activity in the first quarter of fiscal 2016. Compared with the same period in fiscal 2015, year-over-year growth rates of inpatient admissions dropped significantly.

Inpatient volume growth is being stunted the most on less-acute patient volumes, as shown in first quarter results, according to Fitch Ratings.

Factors contributing to headwinds against inpatient admissions include pressure by payers to reduce short-stay admissions and efforts to reduce readmissions; increasing prevalence of high-deductible health plans, which encourage patients to seek care in less expensive settings outside the acute care hospital; and technological advances that enable healthcare providers to handle more complex cases in the outpatient setting.

Hospital companies with a business mix weighted toward rural hospital markets and a high exposure to less acute patient volumes — such as Franklin, Tenn.-based Community Health Systems and Brentwood, Tenn.-based LifePoint Health — averaged negative 3.7 percent year-over-year organic growth in admissions and 0.7 percent growth in admissions adjusted for outpatient activity. In comparison, growth rates for peers focused on large suburban and urban hospital markets were 2.3 percent and 3.8 percent, respectively.

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