Is America Getting Its Money’s Worth out of Outpatient Care?

Article by Darlene Oakley

In 2006, a McKinsey & Company study found that the United States spent more on outpatient care than any other health care system component to the tune of $680 billion – more than 41 percent of overall health care spending (TheIncidentalEconomist) and more than double what is “normal” based on gross domestic product, or GDP.

The amount a country spends on health care is governed by per capita GDP, which is the “monetary value of all the finished goods and services produced within a country’s borders in a specific time period…usually calculated on an annual basis” (Investopedia).

The philosophy behind the shift to outpatient care was to divert patients out of hospitals for initial treatment, follow-up or rehabilitation, thereby saving health care insurance companies money, patients’ and businesses time and money, and paying physicians and health care providers sooner.

Since the United States is spending nearly double what it was in 2003 and is well ahead of other Organisation for Economic Co-operation and Development (OECD) countries in its health care spending, you have to wonder if all this money is really having any effect on lowering fatality rates, emergency room visits, and hospital readmittance relating to treatments or conditions for which patients were discharged.

Studying the Statistics

The following information was adapted from the 2004 report “Health Care in America Trends in Utilization” published by the U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, and National Center for Health Statistics accessed through the CDC website:

“Between 1992–93 and 1999–2000, the rate of [emergency department] visits because of adverse effects [of prior medical treatment] almost doubled, from 2.7 per 1,000 persons to 4.8 per 1,000 persons…These visits were
equally divided between complications of medical or surgical care and adverse drug reactions. In 1999–2000, about 13 percent of these visits resulted in a subsequent hospital admission.”

“During 1999–2000, [those] 65–74 years of age made 60 percent more
ED visits for an adverse effect…than persons under 65 years of age…. The increase in adverse effects visits among the elderly is also associated with an increase in the percentage of [emergency department] visits….”

“Of the 2.4 million persons who died in 1999, about one-third…850,600 deaths occurred in short-stay hospitals…represent[ing] a 21 percent decline since 1985…. During the same time period, the comparable rate of deaths occurring in nursing homes increased from 16.5 per 100 deaths in 1985 to 25.7 per 100 deaths in 1999. This pattern of deaths is consistent with increasing transfers of the elderly from hospitals to nursing homes (see “Hospital Transfers to Nursing Homes”).”

“In 1992, of the 2.2 million deaths in the United States, 197,400 patients were enrolled in a hospice program at the time of death…. By 2000, both the number of patients in a hospice care program at the time of death.… and the rate of deaths occurring while enrolled in a hospice care program … had more than doubled.”

“[H]ome health care is provided for rehabilitative or restorative care …
[T]he rate of home health discharges … increased during the 1990s …, the number of deaths among home health discharges declined from 228,500 deaths in 1992 to 166,500 in 2000. The share of home health deaths among all deaths in the United States also declined [3.6 percent]…”

Does Outpatient Care really Work

The fact that America is spending so much money on outpatient care in and of itself is not a bad thing. It is fairly easy to understand that the cost for a three-day hospital stay is much less than a seven-day hospital stay, which, if managed properly, can be of advantage to everyone. But diverting some hospital care to outpatient services does pose some risks.

There is the chance that patients will not seek outpatient care at all. There is the chance that patients will not comply with outpatient care protocols and condition management recommendations. There is the chance that patients will react adversely to medications. There is the chance that even with outpatient care patients will experience unanticipated complications associated with their treatment or surgery.

Perhaps the huge expenditure on outpatient health services would seem worth it if there were definite signs of overall improvement in patient health. It's probably about time for the CDC and others to conduct another study to see how far things have come.

The only conclusion one can make is that outpatient care overall is a worthy concept. Our medical system could not handle every treatment being conducted in a hospital. So outpatient care is here to stay. But it is important to recognize that despite the billions spent annually on outpatient care doesn’t necessarily mean that there will be no complications or even deaths associated with the original health issue for which a patient sought medical treatment. Outpatient services may have just shifted the location of where these complications are experienced and treated. It is also important to note that the lack of clear supportive, statistical data for the benefits of outpatient care doesn’t necessarily reflect an elevated percentage of risk compared to care provided in a hospital setting, nor do the less-than-stellar numbers reflect a substandard of provision of care.

Sources: CDC (www.cdc.gov/nchs/data/misc/healthcare.pdf); TheIncidentalEconomist (http://theincidentaleconomist.com/wordpress/what-makes-the-us-health-care-system-so-expensive-introduction/); WebMD (www.webmd.com/a-to-z-guides/outpatient-services-important-considerations); Investopedia (www.investopedia.com/terms/g/gdp.asp)

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• Wellness