Forecast Reveals 3% Decline in Inpatient-Utilization Over Next 10 Years

Sg2, a healthcare intelligence and information services company based in Skokie, Ill., held its 2011 Annual Business and Technology Forecast in Chicago on July 20. John Peabody, MD, PhD, FACP, CMO and senior vice president of Sg2, spoke Wednesday morning and presented the company's forecast on utilization trends across the healthcare system.

Sg2 has been conducting its national forecast for nine years, and this is Dr. Peabody's fifth year forecasting healthcare trends. This year, Sg2 adopted a new approach in its forecast, focusing on specific service lines and sites of care.

1. Inpatient and outpatient sites of care will become "different worlds."
From 2011-2021, Dr. Peabody said adult inpatient volume will decrease by 3 percent, while outpatient volumes will grow by 32 percent. These figures factor in population growth, which is considered the biggest driver in healthcare volume. Regions with slow growth can expect an even larger decline in their inpatient volume.

A number of factors are weighed for this forecast, which Dr. Peabody distinguished from a "prediction" in it is a science of studying trends. Population growth, epidemiology, economics, payment and policy, innovation and technology and developments in the delivery of care (such as evidence-based medicine) were all factored.

2. Dramatic shifts in cardiovascular and cancer care.
Next, Dr. Peabody shared the forecast for IP and OP use rate specific to service lines. From 2011 to 2021, the IP setting will see a dramatic drop of 27 percent in its cardiovascular use rate, while outpatient will see a 19 percent increase in this specialty. Dr. Peabody attributes this trend to numerous factors, such as the increased utilization of medications to treat heart conditions rather than stenting, which requires hospitalization.

Still, cancer services will be the greatest source of OP growth. Dr. Peabody expects a 27 percent increase in the use rate of OP cancer services, partially because cancer is likely to become the leading cause of death in the next year. Still, the number of cancer survivors in the United States increased from 3 million in 1971 to 9.8 million in 2001 and 11.7 million in 2007 — an increase from 1.5% to 4% of the U.S. population, according to the CDC.

3. Home care and disease prevention will play larger role.
Patient volume has shifted from IP to OP settings, but now Dr. Peabody said we should think about the transition from OP to home care. This includes telemedicine or e-visits, evaluation and management, and chemotherapy. E-visits alone are expected to drive an increase in the use of home visits by 924,000 over the next 10 years.

Dr. Peabody narrowed his forecast to pneumonia patients and their use of various healthcare settings. From 2011-2021, IP use will decrease by 48 percent, while use of the physician office will increase by 23 percent. Hospital OPs and ambulatory surgery centers will also see an increase in use rate, at 24 percent and 30 percent respectively.  

The presentation concluded with Dr. Peabody's recommendations for hospital leaders and physicians to determine local market opportunities for key service lines, understand the relationship between diseases to optimize quality initiatives and analyze forecasts by sites of care. He also stressed the increased emphasis on preventive care — colonoscopies, for instance, are expected to increase by 35 percent in volume over the next 10 years. Opportunities to prevent disease onset and progression can span years while opportunities to capitalize on intervention are frequently limited to days or months.

Learn more about Sg2.

Related Articles on Healthcare Trends:
The Quiet Takeover: Insurers Buying Physicians and Hospitals
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Trends Unfolding in Physician-Hospital Alignment


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