Hospital admissions continue to decline

The number of "heads in the beds" remains a key factor in any hospital's financial success, despite the decades-long migration of health-care services to outpatient settings.

But last year, the trend of declining inpatient admissions accelerated at many Philadelphia-area hospitals and health systems, according to municipal-bond disclosures analyzed by The Inquirer.

A big factor is a surge in short hospital stays - known as observation cases - that do not count as full admissions and pay only about a third as much as inpatient admissions. But that's not the only reason, health-care executives said in interviews Wednesday.

"Systemwide, we used to admit 28 percent of the patients that would come into the emergency room," said Jack Lynch, chief executive of Main Line Health. "We are down to 21 percent."

Other factors in that decline besides the increase in short stays, Lynch said, are a concerted effort to admit patients only if it is absolutely necessary and a reduction in the number of readmissions - a measure Medicare has used since October to penalize hospitals financially.

The number of patients readmitted at Main Line Health within 30 days of being discharged fell by 373, or 14 percent, during the second half of 2012 compared with the same period of 2011, officials said.

Main Line Health is part of the Jefferson Health System, which reported a 7 percent decline in admissions during the six months ended Dec. 31.

Overall admissions at nine health systems in Southeastern Pennsylvania during that six-month period totaled 193,406, down 4 percent from 201,404 in 2011, when admissions were off by 1.5 percent from a year earlier.

In South Jersey, where five hospitals and health systems recently reported preliminary results for all of 2012, inpatient admissions were nearly flat at 148,431, down 289 or 0.2 percent. In 2011, admissions were up 1.7 percent at South Jersey hospitals from 2010.

The Kennedy Health System, with a 6 percent decline in admissions, drove the South Jersey results. Observation cases more than doubled at Kennedy, to 4,929 from 2,234.

"Kennedy's volumes are actually up when you look at the number of patients we are caring for in both the inpatient and outpatient settings," president and CEO Martin A. Bieber said in a statement. He said the system was investing "in providing the very best of care in the appropriate settings, consistent with the Affordable Care Act."

Still, Kennedy's net patient revenue fell 1.4 percent, to $484.8 million in 2012 from $491.5 million in 2011. Kennedy said in January that it was in early discussions with Virtua about ways to collaborate.

Cooper University Health Care bucked the industry trend, reporting a 6 percent gain in inpatient admissions despite a 28 percent increase in observation cases.

Cooper CEO John Sheridan attributed the gain to numerous investments, including a new parking garage in 2007, a 10-story patient pavilion in 2008, a tripling in the size of the emergency department in 2010, and the addition of 100 doctors to the staff over the last five years.

The Roberts Pavilion opened with four floors left unfinished for expansion. "We are now ready to start building out two more floors" and add four operating rooms over the next year, Sheridan said.

David McQuaid, president of Thomas Jefferson University Hospitals, said declining inpatient numbers are part of the new health-care economy.

"It is in fact what the Affordable Care Act is designed to do," he said.