Many hospitals and health systems struggled to maintain inpatient admissions in 2022, adding to financial woes already compounded by labor shortages and higher operating costs.

Three years into the COVID-19 pandemic, industry watchers are doubtful inpatient volume will ever fully recover to pre-pandemic levels amid the ongoing transformation in care delivery. One big factor at play: the overarching shift towards outpatient care, typically a cheaper option for patients and providers. Health systems continue to invest in ambulatory centers and reserve hospital beds for more complex, higher-acuity cases.

However, outpatient care often means less reimbursement from payers, and as a result, may not be enough to plug the financial holes left by fewer inpatients. There is also the rise in telehealth services, including hospital-at-home programs designed to keep people out of inpatient facilities.

For 2022, a slew of health systems reported fewer inpatient admissions, or at best, a marginal increase compared with 2021. The systems, including Tenet, Renton, Washington-based Providence and Rochester, Minnesota-based Mayo Clinic, sustained billions of dollars in income loss, with many ending the year at a net loss.