Growth in Outpatient Care and Observation Status Challenge Healthcare Forecasting

The current issue of HealthStream’s PX Advisor includes an interview with Joanne Aquilina, CFO at Bethesda Health in South Florida. We sought her expertise about the current healthcare climate and a forecast of what’s ahead. Ms. Aquilina’s point of view has been honed through more than 20 years in hospital financial management and over 10 years of public accounting. Covering a wide range of topics, she focused on several key factors affecting healthcare today and tomorrow.

The Dilemma of Outpatient Care

Shifts in volume from inpatient to outpatient care are becoming an even bigger obstacle to the CFO’s ability to build forecasts. Ms. Aquilina suggests many hospitals are not prepared to address the financial impact of this inevitable trend.

Like many hospitals, Bethesda has turned to a merger opportunity to strengthen its position in the market. To advance their strategy, Bethesda has entered into an agreement to merge with Baptist Health South Florida, the largest nonprofit health system in that region of the state. Baptist Health is an eight-hospital system headquartered in Coral Gables. It is widely regarded as a hospital leader in opening urgent care centers, operating about 30 outpatient and urgent care facilities spanning three counties. In Ms. Aquilina’s opinion, “The number one reason for the merger is the need to focus on the outpatient growth side.” The merger is expected to be complete later this year.

Observation Status: Same Care, Lower Reimbursement

Another challenge she sees is the rise in patients who do not meet admission criteria, but are placed in hospital beds in an observation status. Like many hospital systems, Bethesda sees more and more patients being held overnight for two midnights who still don’t meet admission criteria. “Unfortunately, although some people debate this, we provide the same level of care from a cost standpoint, the same level of nursing care, whether a patient is admitted to a med-surg bed or placed in an observation bed,” she elaborates.

To better manage observation patients, Bethesda has established a dedicated unit. In some cases, Ms. Aquilina states, physicians still find it necessary to order aggressive testing to determine whether patients should remain in the hospital. “It’s difficult to manage when you have the same level of cost and care for an observation patient as an inpatient, but a much lower level of reimbursement from Medicare and insurance plans,” she adds. Collaboration with physicians will be an important part of resolving this issue.

To download this issue of PX Advisor, which includes the full article interviewing Joanne Aquilina, complete this form.

April 1, 2021