Percent of Outpatient Revenue v. Occupancy Rates

We’re always exploring differences among major peer groups to determine whether there is a relationship between care delivery and economics.

The new convergence of Price Transparency, HDHPs, shifting Outpatient Care delivery and Consumerism…all challenge the current business model for care delivery.

  • Median Outpatient Revenue % is approaching 60% of hospital revenue
  • Median Inpatient Occupancy Rate now hovers at 52%
  • Pricing transparency will empower consumers where core CPTs account for 95+% of revenue
  • 60% of adults pay first dollar of care with HDHPs
  • In health care like all industries, when price matters, consumers respond
  • How will hospitals respond to these extreme shifts in care delivery, venue and engagement?

In the charts below, you’ll see the median Outpatient Revenue % and Occupancy Rates for different peer groups of hospitals.

We’ve all witnessed the shift to HOPD services and shouldn’t be surprised with the uptake in ASC development by freestanding operators and hospital systems alike.

  1. The carrying cost of Debt per Bed is above $400,000, and unsustainable at 52% occupancy
  2. Salaries account for 39% of Total Operating Expenses
  3. Capital Costs as a percent of Total Operating Expenses add 6% to maintain infrastructure

In summary, inpatient care is becoming an expensive specialty business to operate. Half the beds in the U.S. sit empty and the capital and fixed costs are structured for a growing business. 

To remain competitive, it’s essential to know where competitors stand with metrics defining value.

Franklin:BI clarifies that for you at the speed of thought. 

Franklin:BI curates virtually all health care provider data for every year published and ties it together contextually and competitively. Connecting financial and operational performance to outcomes; quality and safety with your own market’s data gets you to better, faster, smarter answers.