The Current State of Hospitals

The financial performance of hospitals across the U.S. has been under pressure. 2016 was a low point with huge losses hitting some of the largest providers. Some of it pertains to changes in healthcare policy. Most of it has to do with imbalanced supply and demand, as well as poor operational management.

For some time, hospitals have operated on a model of selling services and developing scale through mergers and acquisitions – overloading on resources, employees and risk. With costs exceeding revenue they’ve posted large losses to operating income. Very few hospitals have concentrated on efficiency or cost effectiveness. And, hospitals are expensive. In-patient pneumonia treatment is 15-25 times more expensive than out-patient treatment.

One quote I saw summed it up best, “Patients are older, sick and it’s more expensive to look after them.” But who really wants to be in a hospital after all? And that is precisely where the future of hospitals is heading. Acute care, by it’s very nature, will remain in hospitals. Care outside of that will greatly expand outside of the hospital setting. This transition outside of the hospital is being accelerated by innovative technology, approaches and the burning need to lower costs and deliver value.

The Future State of Hospitals

Hospitals will deliver the same experiences that consumer brands do.

You’ll be able to schedule appointments and check in online, view medical records from anywhere at any time. Monitoring will follow you around the hospital, then at home when you leave. Doctors and nurses will be available via video or chat, in addition to in-person.

Telemedicine will play a big part because it can reduced costs through earlier discharges, improved outcomes and freeing up staff.

Growing rapidly, virtual doctor visits are already measured in the millions per year. There are many types of visits that are well suited to telemedicine. Pre-admittance, in-hospital and post-discharge are all possible use cases.

Believe it or not, the ancient “house call” is seeing a revival.

In-home care is being employed by hospitals as another way to lower costs and improve outcomes. Some studies show in-home care can be provided for up to 50% less than in-patient care with better outcomes and higher patient satisfaction. Besides, who wants to go to a hospital when it can come to you.

The all-in-one hospital will go away.

Providing all forms of speciality care is costly. Hospitals will specialize more in certain practices – cardiac care, cancer treatment, etc. Specialization means highly trained staff, precision procedures (such as minimally invasive surgery), and services to speed recovery, such as physical therapy, diet and counseling.

Size will change as well.

With more services provided through outpatient clinics, same-day surgery centers, micro-hospitals and free-standing emergency rooms, hospital size will have to scale down to account for the shift. On average, these facilities admit less than 10% overnight, while sending 90% home after a one or two-hour visit.

Reaching out to at-risk patients will also be a service of hospitals.

Rather than waiting for a very sick patient to show up for emergency treatment, providers will deliver programs to improve health through well-being.


The transition has begun. It will take time for all these changes to happen. But in the end, both the hospitals and the patients they serve will be better for it.