By Randena Hulstrand
While the healthcare industry has faced tremendous obstacles to keep pace with workforce demands, capacity constraints, and continually changing payer and policy considerations, one thing is for certain: These challenges will only continue to evolve in the coming decade as the patient population ages and acuity rises.
The only way forward is to embrace a robust — and strategic — plan.
The annual Impact of Change® by Sg2, a Vizient company, aims to help healthcare leaders by projecting industry growth across key service lines and helping organizations understand care delivery opportunities in the decade ahead. The full forecast — which assessed 81 inpatient and 203 outpatient procedures across 30 service lines — projects these staggering highlights by 2034:
- Inpatient utilization to rise 3% and days to increase 9% due to the prevalence of chronic disease and behavioral health conditions that spur demand for complex care and tertiary services.
- Outpatient volumes jump to 17% due to outpatient surgical services, driven by expanded capabilities and patients' procedural needs, and chronic care management required to control ongoing conditions.
- Behavioral health inpatient and outpatient volumes will grow to 8% and 26%, respectively, driven by increasing prevalence and long-standing workforce and access challenges.
- 23% of evaluation and management visits will be delivered in a virtual setting, enabled by greater adoption of technological advances.
- Further enabled by virtual capabilities, home health is to increase 22%.
But what does this actually mean for healthcare organizations? Here, Vizient experts on the Sg2 intelligence team — including Tori Richie, senior consulting director, who leads the forecast, along with principals Chad Giese and Karyl Kopaskie — discuss insights from this year's projections that can help healthcare leaders achieve financial sustainability and growth — and, most importantly, provide accessible and effective patient care.
Q: With inpatient utilization and length of stay projected to rise over the coming decade, why will reducing unnecessary emergency department and inpatient utilization alone not be enough to combat capacity issues?
Richie: Healthcare systems can't continue to provide care using the same old approaches with the capacity constraints hospitals now face. As patient days increase another 9%, organizations can't simply build their way out and must look at care redesign strategies to improve access. While organizations should reduce unnecessarily utilization, that alone is not going to solve for capacity. Leaders need a deeper understanding of who's in their inpatient care setting. Most inpatient utilization stems from low- to medium-acuity discharges, does it make sense for these patients to leverage a tertiary or quaternary facility? Could we instead transfer these individuals to a community hospital, leverage a hub-and-spoke model or shift them to a care-at-home program to optimize care delivery?
To further control patient acuity, it's important that patient comorbidities are managed upstream in the outpatient space, whether that's preventative support in the clinic or ensuring they have access to maintenance medications and therapies. If a patient goes into the ED for a heart attack and their behavioral health or COPD comorbidities have been managed, hospitals can then treat and release that patient in a much more efficient manner.
Considering that surgical care is expected to increase to 25% over the next decade, why is it important for healthcare organizations to have a segmented approach to their system of care?
Richie: Leaders from resource-constrained health systems are recognizing they no longer can provide the best care to all patients. Instead, a segmentation framework allows them to drive specificity to unique clinical areas. Then they can make decisions about prioritizing patient segments and work to ensure a connected care model by providing access to all patient services through formalized partnerships or joint ventures.
This more effectively prevents fragmentation of care episodes and integrates patient care pathways in a more meaningful way. For example, navigating patients through their care journey from consultation to diagnosis to treatment and ensuring warm hand-offs to prevent things like duplicative diagnostic tests — organization must think about how to make a care episode as convenient, consumer-focused and resource-efficient as possible.
Kopaskie: In pediatric service lines, children's hospital leaders often have it in their missions to serve every child in their community. But where is the best place for them to serve those patients comprehensively? If they're providing care in the transactional space, such as treating ear infections, is it better to build and own an urgent care center or partner with other stakeholders in the community, such as disruptors? It may be more advantageous for them to focus on ensuring that patients — like those with cystic fibrosis — have easy access to preventive and chronic care management when they need it. Using an outpatient portfolio segmentation approach sets expectations around what these programs need in terms of access.
With utilization trends varying across service lines, can you discuss why inpatient cancer and surgery have declined but behavioral health and cardiovascular are on the rise?
Giese: While the forecast may show a decline in inpatient discharges for some service lines over the next 10 year, it's important to remember that those patients are being captured on the outpatient side. Leaders emphasizing outpatient care for chronic disease management will mitigate some high-acuity services, including admissions, that would result if a patient went unmanaged.
Richie: Behavioral health is a great example of how lack of access is driving inpatient utilization, which is expected to grow to 8% over the next decade. Private equity investors have recognized the increasing need for behavioral health services and are investing in the space to meet demand and capture downstream procedural utilization. With increased access to services, we expect to see increased utilization. It's an "if you build it they will come" scenario. And as behavioral health awareness increases with more bipartisan government commitment to the management of conditions, overall patient care will be positively impacted.
How can providers use a programmatic approach to drive growth in desired areas and mitigate growth in others?
Giese: Heart failure has been a challenge for healthcare systems over the last 25 years with no cure and few good treatments for the condition. In order to slow progression, patients need constant interaction and management to ensure they are not having exacerbations that force them to visit the ED for rapid triage. It's better to get ahead of those issues by making sure that ambulatory connections are in place — coordinating care across the continuum is incredibly important for the cardiac service line side to manage patients' needs more effectively with good outcomes.
What can traditional providers learn from disruptors about delivering care in a more coordinated way?
Richie: If disruptors such as private equity are interested in coordinated care, it means they've figured out the financial upside. If that's the case, so can a traditional health system. Does that mean health leaders need to approach care a little differently? Sure, but that's really what we want organizations to be thinking about. Behavioral health is a great example of where a lot of private equity investments are opening access to services such as patient-to-provider cognitive behavioral therapy. But they're mainly in the game to drive utilization and downstream procedural volumes like electroconvulsive therapy, transcranial magnetic stimulation and ketamine injections, which can deliver a lot of revenue. But disruptors actually fragment the care. Traditional providers can adopt this mindset to drive similar returns but deliver care in a more coordinated manner.
Kopaskie: Another example is in women's health. Despite women's health service lines seeing true utilization decline due to declining birth rates, it's also an area for potential investment. Yes, there's not a lot of downstream procedural activity that providers can capture without having access to an ambulatory surgical center or a hospital. But because of the gaps in service patients are experiencing — from fertility and pregnancy to menopause and pelvic pain services that are coordinated, digitally enabled and personalized — disruptors are hoping to reengage this population. The lesson here for traditional healthcare systems is to identify how they could serve this patient population more effectively from diagnosis through treatment.
How are pharmaceutical innovations helping to reduce and/or eliminate surgical interventions that will impact utilization?
Richie: In 2023, the FDA approved 55 "novel" drugs to treat conditions spanning a variety of service lines, including cancer, neurosciences and medicine. As the innovation cycle shortens for pharmaceutical development, organizations should prepare for increased disruption to previously established care pathways. In addition to procedure shifts, pharmaceutical advances enable medical management of select patient populations and in some cases reduce or eliminate the need for surgical intervention. This is an interesting concept that we're seeing play out with GLP-1s as use of weight management drugs prevent the need for bariatric surgery. This is a good example of seeing an uptick in in medical intervention and a decrease in in surgical services. Inpatient bariatric surgery volumes will see a 15% decline in the next decade.
Pharmaceutical innovation is transforming cancer care pathways. Advances in targeted therapies allows patients to receive more effective and personalized treatment than ever before. Development of these therapies also enables the de-escalation of their condition, potentially reducing the need for more invasive second-line treatments like surgery — think of a breast cancer patient receiving a targeted drug therapy who later needs a lumpectomy instead of, the more aggressive procedure, a mastectomy.
How will virtual care evolve and vary across specialties and service lines?
Richie: Despite virtual care having decreased to almost pre-pandemic numbers (with behavioral health as the exception), 23% of evaluation and management visits will be delivered in a virtual setting by 2034. You'll see more virtual uptake of service lines that are constrained, such as behavioral health (allowing more access to those in rural and underserved communities); conditions like chronic pain (partly due to availability of ongoing payment for established patients); and select parts of cardiovascular (where remote patient monitoring can expand local services across broader geographies). Anything that leans toward surgical services, such as orthopedics or spine, will have less virtual uptake. New patient visits are less likely to occur virtually due to physician and patient preferences and a less favorable reimbursement environment.
As the aging high-acuity population continues to push length of stay, how can organizations use their care-at-home portfolios to help?
Richie: Home health is expected to grow 22%. As the aging, high-acuity patient population continues to push bed days, organizations must be intentional about how they execute their growth strategy. How many bed days could care at home save? What other capacity constraints could be relieved by a robust care at home offering? These are questions organizations should ask to ensure resources are effectively deployed in a manner that achieves high quality outcomes for patients. To achieve a sustainable suite of services that are well aligned to system goals rather than single-point solutions, leaders should pursue a portfolio approach. Models include on-demand, chronic, acute and continuing care-at-home. Successfully scaling these initiatives is most feasible when they are part of comprehensive care redesign.
Access the Sg2 2024 Impact of Change®
Listen to a Sg2 Perspectives episode where host Richie joins Giese and Kopaskie to further breakdown key trends in the 2024 Impact of Change® and how health systems can use the forecast to inform their strategies.