"It was even weaker than many of us expected," Ana Gupte, a senior analyst with Leerink, said of the inpatient utilization trend. "It's pretty clear there's no volume rebound."
The results bode well for providers that are heavily invested in the outpatient sector, Leerink wrote, tossing shout-outs to the Nashville-based hospital chain HCA, which has about 1,800 ambulatory access points, and Dallas-based Tenet Healthcare Corp., which has about 250 ambulatory surgery centers through United Surgical Partners International, a company it owns a 95% stake in.
Nine percent of heart surgeries took place in outpatient settings within the past year among the survey respondents' hospitals, and respondents said they expect that to grow to 12% in the coming year. Hospital executives expect the percentage of those procedures performed in ambulatory surgery centers will drop from 9% to 7% during that time. Inpatient heart surgeries are expected to drop from 82% to 81%, according to the survey.
Hip procedures, including hip replacements, are expected to increase from 17% outpatient in the past year to 19% in the coming year. Meanwhile, inpatient hip procedures will drop from 77% to 75% during that time. Executives also said they expect urologic, gynecologic, spine and knee procedures to migrate to outpatient settings, according to the survey.
About two-thirds of respondents said they don't plan to change their capital spending in the next 12 months, and 91% did not show a budget surplus as a result of the Tax Cuts and Jobs Act, which Leerink wrote is likely a product of the high proportion of not-for-profit respondents. The tax law contained provisions like a corporate tax cut that mainly benefited for-profit companies.
Leerink predicts similar results over the coming year, with slightly more respondents showing increases for orthopedic, spinal and urologic procedures.
Leerink's survey precedes second quarter earnings releases scheduled next week from for-profit hospital chains like HCA, Universal Health Services and LifePoint Health. Leerink wrote that it expects the higher prices driven by increased acuity that boosted hospitals' first quarter performances will continue through 2018, a trend the investment bank expects will offset weak volumes. Leerink wrote it expects same-store pricing to increase by about 2.3% on average in the second quarter, compared with 3.9% in the first quarter.
Asked to pick the most important driver of utilization in the second quarter, 45% of survey respondents said Baby Boomers aging into Medicare. Another 15% said the lingering effects of the Affordable Care Act, including people gaining coverage through expanded Medicaid or subsidized commercial plans. Just under 13% said the improving U.S. economy.