Topic: Health Care Systems – Part I

Prompt: Define outpatient care. What are several key changes that have been instrumental in shifting the balance between inpatient and outpatient services? Why is it important for hospital administrators to regard outpatient care as a key component of their overall business strategy?


Outpatient care is any healthcare service that does not require an overnight stay in an institution of healthcare delivery (Shi & Singh, 2017). The orthopedic center that I used to work at is a primary example of outpatient care. The center took day appointments as well as after-hours appointments for any emergencies that took place but they did not perform inpatient services. Because of this, the orthopedic center could reduce costs that would have been incurred on overnight patient stays. Another advantage of outpatient care in a facility like this is the recurrence of follow-up visits. After the initial surgery is done, patients return for check-ups thus incurring more revenue for the orthopedic center.

The key factors in the shift from inpatient care to outpatient care are: reimbursement, technology, social, and utilization control factors. Under reimbursement factors, outpatient care has proven to cost less than inpatient care. With technological advances, new diagnostic and treatment procedures make outpatient care easier and there are less invasive surgical methods available. Under the social factor, patients prefer receiving treatment in a community-based setting rather than staying in inpatient care. And finally, under the utilization factor, inpatient care is discouraged by payers (Shi & Singh, 2017). Over the years, there has been a strong gradual shift from strict inpatient care to a wide array of outpatient services (even for complex surgeries).

In the past, most patients were treated in inpatient wards where treatments were demanding and it was necessary for patients to stay multiple days to recover from a procedure (Vitikainen, Linna & Street, 2009). During the mid 1980’s, there was an increase in outpatient services but there was no corresponding decline in inpatient services like there is today. Today, in the U.S., outpatient surgery represents more than 50% of all hospital-based procedures performed (Pollard & Garnerin, 1999). This shift from inpatient to outpatient has occurred greatly from the innovation of medical technology in health delivery services. Technological advancements have created faster and more efficient technology that reduces the hospital stay of patients.

Inpatient care settings mostly involve a collaboration of several healthcare service teams such as: physicians, pharmacists, nurses, technicians, care managers, etc. Outpatient care settings, on the other hand, operate more independently as a single office with health care practitioners and a smaller support staff (Smith & Ferreri, 2015). Even with a smaller team, outpatient services are very efficient and should be utilized as a key business component. The substitution of inpatient care for outpatient care is a way to increase patient throughput and control costs. This shift also releases the capacity in inpatient setting to focus on more complex patient costs. This makes it possible to treat more patients with existing resources (Vitikainen, Linna & Street, 2009). The more procedures that can be performed in an outpatient setting, the more time and resources are freed up to perform the tasks that require more complexity and inpatient services.

Advantages to outpatient services include a high contribution to profits, a continuum of services, and cross referrals within a hospital own network. As mentioned earlier, patients seen in an outpatient setting can then have their follow-up appointments within the provider’s network. Hospitals that offer outpatient services can increase its revenues by referring post-surgical cases to its affiliated units. Physicians in an outpatient setting can experience low operating costs and opportunities to contract with managed care. Studies have shown that outpatient surgery is associated with lower costs, favorable patient outcomes, and a higher level of patient satisfaction (Pollard & Garnerin, 1999). The lower costs, decreased time for procedures, increased revenue for providers, and ease of service for patients make outpatient services a key business component that should be implemented in their core strategy.

Acts 20:35 states, ‘In all things I have shown you that by working hard in this way we must help the weak and remember the words of the Lord Jesus, how he himself said, ‘It is more blessed to give than to receive’ (ESV). By seeking more outpatient services, providers can handle more patients as these patients will not need additional services overnight. Providers have an obligation to help as many people in need as they can and outpatient services allow them to free up enough time to fulfill this obligation.


Shi and Singh (2017) define outpatient care as any type of healthcare service received that does not require an overnight stay in a facility. Additionally, the same text mentions that ambulatory care and outpatient care can be used interchangeably, although outpatient care is a more inclusive and comprehensive term (Shi & Singh, 2017). Personally, I think the largest change and most impactful change to focus on outpatient care is the change in reimbursement referred to as prospective payment systems (PPS). Providers used to have more leniency on hospital length of stay, but the PPS required quicker discharge of patients in order to gain beneficial reimbursement (Shi & Singh, 2017). Basically, if the patient stayed too long in the hospital, the facility ended up losing more money than it gained. Thus, discharging patients earlier requires referrals to outpatient services like hospice, home health care, follow up appointments, and so on to maintain health and continuity of care (Shi & Singh, 2017). Ultimately, the text describes outpatient services as being the big money maker in today’s healthcare and it is especially due to the decrease average length of stay in the hospitals and inpatient facilities (Shi & Singh, 2017).

Another fascinating aspect of our country’s current healthcare is the concept of the diagnosis-related group (DRG) which is assigned and managed by the Center for Medicare and Medicaid Services (CMS) (Marcinko, 2009). Along with the PPS mentioned earlier, this has also had a huge effect on healthcare services in the United States. Every year, CMS establishes DRGs based on a multitude of factors such as diagnosis, age, comorbidities, procedures performed, and eventual disposition of the patient (Marcinko, 2009). These factors contribute to the decisions made by providers and can ultimately cause a heavier lean on outpatient services. In Michigan, their hospitals have seen a 6% decline in patient admissions, 2.5% overall inpatient decline, and a 19% decline in readmissions within 30 days of discharge (Kutscher & Evans, 2013).

Kutscher and Evans (2013) additionally describe a primary reason for focusing on outpatient care: 30% of people they surveyed stated they were struggling to pay medical bills despite their insurance. They argue that the ability to keep people healthy in the first place with outpatient care can still lead to significant facility reimbursement (Kutscher & Evans, 2013). Overall, I think it is evident that the insurance system as a whole needs a huge adjustment in order to provide the best access and affordability for patients to receive care while at the same time providing facilities and hospitals the most profitability. The last point worth mentioning before discussing biblical relations is that the inability of patients to pay for services will lead to their unwillingness to seek outpatient services as well as allowing illnesses and disease to progress significantly before they ever receive care (Shi & Singh, 2017).

In order to provide a biblical worldview this week, I sought out Jeremiah 33:6 (ESV) which states, “Behold, I will bring to it health and healing, and I will heal them and reveal to them abundance of prosperity and security.” Sometimes it pains me that the world of healthcare revolves so much around money. I think the majority of people who choose a job in healthcare do so because they want a fulfilling career centered around the betterment of others. Unfortunately, I think money has gotten in the way of this. Although, I do understand there needs to be a balance of attempted altruism and financial gain in order to keep a facility open. However, it helps me to read that God is looking out for us and our health and we must remember that while we struggle to re-develop our healthcare system as a nation.

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