Health systems struggle to fill beds amid care delivery shifts

Many hospitals and health systems struggled to maintain inpatient admissions in 2022, adding to financial woes already compounded by labor shortages and higher operating costs.

Three years into the COVID-19 pandemic, industry watchers are doubtful inpatient volume will ever fully recover to pre-pandemic levels amid the ongoing transformation in care delivery. One big factor at play: the overarching shift toward outpatient care, typically a cheaper option for patients and providers. Health systems continue to invest in ambulatory centers and reserve hospital beds for more complex, higher-acuity cases. 

However, outpatient care often means less reimbursement from payers, and as a result, may not be enough to plug the financial holes left by fewer inpatients. There is also the rise in telehealth services, including hospital-at-home programs designed to keep people out of inpatient facilities. 

For 2022, a slew of health systems reported fewer inpatient admissions, or at best, a marginal increase compared with 2021. The systems, including Tenet, Renton, Washington-based Providence and Rochester, Minnesota-based Mayo Clinic, sustained billions of dollars in income loss, with many ending the year at a net loss.