New Studies Show Broad Inpatient Utilization Declines in Boston, Newark, and Indianapolis Areas

New Studies Show Broad Inpatient Utilization Declines in Boston, Newark, and Indianapolis Areas

Inpatient volume decreased across most age groups and service lines; markets vulnerable to further declines

Inpatient utilization dropped among most age groups and services lines between 2010 and 2012 in Eastern Massachusetts, Newark, and Central Indiana, according to new studies conducted of these markets by Tufts Medical Center in Boston; Barnabas Health in West Orange, New Jersey; and Community Health Network in Indianapolis. The studies show a broad-based transition underway from an inpatient-focused to an outpatient-focused healthcare system.

These new studies used a methodology created by Kaufman Hall in its analysis of inpatient utilization in the Chicago area, “Where Have All the Inpatients Gone? A Regional Study with National Implications,” originally published Jan. 6 on the Health Affairs Blog.

Broad Declines

All three markets experienced broad declines in inpatient utilization rates per 1,000 from 2010 to 2012.

  • Hospitals in the nine-county Eastern Massachusetts area (population 5 million) saw inpatient utilization decline 5 percent. Declines occurred among all age groups, with the greatest declines among ages 65 and older (10 percent) and ages 0-17 (8 percent). Declines occurred across almost all service lines, with the greatest declines seen in cardiovascular care (14 percent), pediatric care (8 percent), and cancer care (6 percent).
  • Newark (population 277,718) saw a 4.3 percent decline in inpatient utilization. The decline occurred among all age groups, with the greatest declines among ages 65-74 (10.2 percent) and ages 0-14 (7.7 percent). Declines in utilization were seen across most service lines. The greatest declines occurred in interventional cardiology (26 percent), cardiology (17 percent), and endocrinology (15 percent).
  • The nine-county Central Indiana area (population 1.8 million) saw a 2.5 percent drop in inpatient utilization. Declines occurred among most age groups, with the greatest declines among ages 0-14 (6 percent) and ages 15-34 (5.8 percent). Inpatient volume for ages 65 and older increased 0.4 percent. Declines in utilization occurred across many service lines. The greatest declines occurred in gynecology (28 percent) and cardiovascular care (7 percent).

Associated Factors

A notable portion of the reductions appears to be due to migration of cases that may be appropriately and efficiently treated in an ambulatory setting.

For example, reduction in one-day stays accounted for 35 percent of the inpatient declines in Eastern Massachusetts and 30 percent in Newark, suggesting a shift to observation status or treatment in an outpatient facility.

Findings also showed significant and broad utilization declines in cases for which effective outpatient care of chronic conditions can prevent hospitalization—referred to as “ambulatory care sensitive admissions” or ACSAs (examples include admissions for diabetes, hypertension, and dehydration). In Central Indiana, for example, utilization for ACSAs in the cardiovascular care service line decreased 24.1 percent compared with an 8.1 percent decrease for other cases in the service line. In Eastern Massachusetts, utilization for ACSAs in the cardiovascular surgery service line decreased 15 percent compared with a 4.4 percent decrease for other cases in the service line.

Future Declines

The studies show that in each market a significant portion of current inpatient admissions may still migrate to the outpatient setting. If the remaining one-day stays and ACSAs were to move out of the inpatient setting, Eastern Massachusetts and Newark each would see a further drop of 28 percent in inpatient admissions, while Central Indiana would experience a 22 percent drop.


“These findings are further evidence that markets around the country are reaching an inflection point in the shift from inpatient to outpatient orientation,” said Kenneth Kaufman, Chair of Kaufman Hall. “Hospitals need to embrace this new business model, determine the role they want to play, and move promptly to make the necessary changes in their structure, operations, and resource allocation.”

Among the strategic imperatives for hospitals are the following:

  • Begin to leave the hospital-centric business model and invent and embrace a model that is more community-centric
  • Rightsize the business to reflect changing inpatient and outpatient volumes
  • Reengineer care delivery to succeed in a value-based, wellness-focused system
  • Achieve operating sustainability by ensuring cost structure is in line with expected revenue
  • Transform clinical and management teams to have the skills and experience needed for the new delivery and payment system
  • Understand the powerful influence of the retail entrants into the delivery system and how traditional providers can be effective in the retail space