Why would a hospital offer all outpatient care?

While some surgery centers are converting to inpatient status, some hospitals are abandoning that niche and converting to all outpatient care. In 1999, 12 hospitals in the country were outpatient facilities, according to the Chicago-based American Hospital Association. That number grew to 22 in 2000, according to the association. A look at one facility that took this step provides some of the reasons.

Mercy Community Hospital in Havertown, PA, was a 64-bed medical/surgical hospital with a five-OR surgery center and pain center. "Recently, the market has been turbulent, particularly in that reimbursement was not keeping pace with costs," says Martin McElroy, hospital administrator. "Also, malpractice has escalated in this area, [and] with the nursing shortage, salaries were going up," McElroy says.

The hospital couldn’t survive with 64 inpatient beds when they were surrounded by large established institutions, including one from their own health system within seven miles. Thus, the inpatient hospital services and the emergency department have ceased operation. An imaging center and an outpatient radiology area have been added. Sixty percent of the full-time employees are being placed elsewhere, and 25% will remain on campus, he says. The remaining 20% have been terminated. Now, the hospital is adjusting to being an outpatient facility.

"We hope to provide some things that the community is looking for now: state-of-the-art services in a manner that is customer-friendly," McElroy says. "We want to reduce waiting times and focus the specific needs of outpatients."

One of the biggest challenges has been changing the culture to focus more on patients and physicians, he says. "From inpatient to outpatient, the challenge is — what is the level of care you’re able to give? Is it customer-friendly to the point at which people feel there’s value added to that?"

Expect more hospitals to follow Mercy’s lead, McElroy predicts. "As you look to the future, the things that keep coming up more and more are the ability to serve the patient and physician in a new health care model that has easier access, more timely services being provided, and also the ability to get the turnaround time that patients are demanding," he says. "Those types of things, if we can address them, will help us become successful."

Other hospitals should expect to see similar demands from patients, he predicts. "Some of those hospitals may lose business, and it also may force them to see changes that we think patients and physicians are demanding," McElroy says.


For more information on hospitals converting to outpatient care, contact: Martin McElroy, Hospital Administrator, Mercy Community Hospital Center, 2000 Old West Chester Pike, Havertown, PA 19083. Telephone: (610) 853-7001. Fax: (610) 449-0415.