Economic Analysis of Outpatient Care Centers vs. Hospitals

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Economic Analysis of Outpatient Care Centers vs. Hospitals A recent phenomenon in the health services is the burgeoning of outpatient healthcare centers. Particularly vigorous growth has been observed in centers that perform diagnostic tests and simple surgeries and procedures like colonoscopies. At the current state, outpatient care centers outnumber hospitals in Pennsylvania. Furthermore, these centers now perform one of every four surgical and diagnostic procedures in the state (Levy 2006). However, the trend applies nationwide, and other states could easily follow suit. Many critics have commented on the negative and positive aspects of this trend. What remains to be determined are the long term effects (on health and the economy) of this paradigm shift, in terms of the wellness of the community as well as economically. Proponents of the movement have pointed to the lower overhead for these clinics trickling down to lower costs for patients. However, critics skeptically question whether the real benefits are for the patients or simply as a mechanism to stuff physicians' wallets. When considered as firms in the marketplace, it is evident that these two groups, both servicing the health needs of the community, have vastly different balance sheets and income statements. This transfers over to a difference in operational functionality, profitability, and cost structure. Furthermore, the disparity of financial motivations that is visible in the varying profit margins is of concern to the community. All of these are important considerations to be made when considering the economic implications of this new phenomenon. The most important aspect of this shift to analyze is the health aspect – how effective and safe are outpatient... ... middle of paper ... ...fault.aspx?doc_id=89001 Levy, Marc (2006). Outpatient Centers Outnumber Pa. Hospitals as Profitability Soars. The Miami Herald. Retrieved November 7, 2006 from Harvey Jay Cohen, John R. Feussner, Morris Weinberger, Molly Carnes, Frank Hsieh, Philip Lavori. (1996). The New England Journal of Medecine. A Controlled Trial of Inpatient and Outpatient Geriatric Evaluation and Management, 346, 905-912. Retrieved on November 8th, 2006 from John B. Pollard, Ann L. Zboray, Richard I Mazze. The International Anesthesia Research Society. (1996). Economic Benefit Attributed to Opening a Preoperative Evaluation Clinic for Outpatients, 83,407-10. Retrieved on November 8th, 2006 from

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