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Fitch: ACA Shifting Care from Hospital to Outpatient Settings

NEW YORK--(BUSINESS WIRE)--Spurred by the Patient Protection and Affordable Care Act (PPACA), a business model shift away from inpatient care towards outpatient and ambulatory care is forcing a reassessment in how nonprofit hospital clinical performance is measured, according to a Fitch Ratings report.

'The U.S. healthcare industry is in the midst of significant change, sparked by the passage of the PPACA, as well as by technological changes and clinical advances in care delivery,' said Jim LeBuhn, Senior Director at Fitch Ratings.

'Traditional utilization metrics have focused primarily on inpatient activity. With the increasing shift towards outpatient and ambulatory care, the need to capture and measure that volume becomes increasingly important in assessing the strength of a hospital or health system's future revenue stream.'

Reflecting national trends, from fiscal 2010 to fiscal 2013 Fitch's rated hospital and health system portfolio experienced a decline of inpatient volume compared to an increase in ambulatory services.

Fitch believes that value-based reimbursement models, risk sharing arrangements and increasing consumerism will reward those providers that deliver high quality, low cost care in the most convenient setting.

Still, traditional inpatient, volume based metrics remain important indicators of market relevance and competitive position. In addition, inpatient admissions, surgical volumes, emergency room visits, average length of stay and case mix index will continue to have a strong influence on overall profitability.

For more information, a special report titled 'Utilization Metrics Review' is available on the Fitch Ratings web site at www.fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research: Fitch: Utilization Metrics Review (A New Business Model for the Healthcare Industry)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=759607

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Contacts

Fitch Ratings
Emily E. Wadhwani, +1 312-368-3347
Director
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
James LeBuhn, +1 312-368-2059
Senior Director
or
Media Relations:
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com