Does Expanding Outpatient Physicians Really Help Stabilize Your Hospital Revenues?

Hospitals that hitherto have been troubled with in-patient operational losses may just have found a solution in outpatient mode. Contrary to stagnant inpatient volumes and revenues, outpatient volumes seem to have picked up in recent years. As a result, operational revenues at hospitals seem to be firming up. It is also worthwhile to be informed of some interesting statistics unearthed by the research agencies – Fitch’s research has found the average operating margin to have shifted from 2.6% in 2010 to 2.7% in 2011 while Moody’s have estimated it to be hovering around 2.5%.

While outpatient mode may have marginally helped offset the inpatient downturn, it is expected that hospitals’ outpatient windows will further gain from the steady decline in inpatient cases – the decline in patient volumes, which previously was in sub-decimal, seems to be heading towards a double-digit figure (prominent research agencies currently estimate it to be around 9%). Coupled with this dip in inpatient volumes, the recent health care reforms may force hospitals to operate at negligible profit margins. With so much pressure behind, hospitals should look at outpatient mode, not as an option but necessity to sustain and grow.

But expanding outpatient windows has its own challenges – finding competent physicians or doctors, costs associated with their overheads, deciding on disciplines to be more aggressively followed under ‘outpatient’ category, and not but not least the likely billing challenges on account of expanding outpatient services.

Recruiting physicians for outpatient services will be a primary challenge. As every hospital begins to scout for talents from a limited pool, the aspirants may begin to command a higher price. The initial cost of hiring may temporarily be result in negative revenues. Therefore, hospitals should be prepared for such a scenario and be optimistic of eventual turnaround in revenue margins.

Second, it may not be viable to pursue every discipline under ‘outpatient’ category – hospitals should explore their intrinsic competence and decide on disciplines that are demanded most in their location of operation.

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Last, the shift to outpatient services may give rise to an unprecedented increase in billing activities. The sudden increase in billing may prove to be unbearable or burdensome to in-house or the billing services provider. Unless it is eased by a superior billing intervention, it may prove to be responsible for delay or denial of claims.

Notwithstanding hospitals’ capacity to alternate to outpatient mode with a larger physician base, it is advisable to be mediated by people who are sensible in clinical and operational issues. has time and again proved to be an able ally in times of clinical and operational crisis. Our resource base spread across 50 states in the U.S. offer instant remediation for billing, coding, RCM, AR Management, and a host of clinical and operational issues. At a time when hospitals’ stand on the verge of a major shift from inpatient to outpatient mode, MBC may well be your platform for prosperity.