Inpatient vs. Outpatient Care and Coverage

So what's the difference between inpatient and outpatient care and how does it affect me as a patient or insurance policyholder? Inpatient and outpatient care refer to the way that a healthcare service is provided. Which type of care you end up with will depend upon how involved your treatment needs to be as well as the additional resources that may be required to deliver it.

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What is Inpatient Care?

Inpatient care generally refers to any medical service that requires admission into a hospital. Inpatient care tends to be directed towards more serious ailments and trauma that require one or more days of overnight stay at a hospital. For the purposes of healthcare coverage, health insurance plans require you to be formally admitted into a hospital for a stay for a service to be considered inpatient. This means a doctor has to write a note to give the order to admit you, so if you were in the emergency room and were asked to stay overnight for “Medical Observation”, it does not make you an inpatient.

Over half of all inpatient hospital admissions come through the emergency room department. Health insurance plans break out emergency room vs. inpatient facility care when it comes to your share of the costs. In some plans, the copays for emergency room services are waived if the patient is then admitted to the hospital.

Inpatient care is broken into two parts: the facility fee and those related to the surgeon/physician. Generally speaking, copays for inpatient services are structured either on a per stay or per day basis for the facility. For some of the plans we've surveyed, copays are often a few hundred dollars per admission and up to as much as $1,000. In a few cases, we've seen cost sharing including both a multi-hundred dollar copay and coinsurance on top of it.

What is Outpatient Care?

Outpatient care, on the other hand, is medical service provided that does not require a prolonged stay at a facility. This can include routine services such as checkups or visits to clinics. Even more involved procedures such as surgical procedures, so long as they allow you to leave the hospital or facility on the same day, can still be considered as outpatient care. Many surgical services, rehabilitation treatments, as well as mental health services are available as outpatient services. Outpatient care tends to be less expensive, since it is often less involved and does not require a patient's continued presence in a facility, which uses up less of the hospital or medical clinic's resources.

For the purposes of insurance, most outpatient care is broken out based on the type of service provided (Primary Care Physician, Specialist, Mental Health, etc.). Outpatient surgery is one area that is specifically identified, and describes your share of costs should you need a procedure or operation that does not require overnight admission at the facility. Like inpatient treatments, the costs associated with the facility itself and the physician/surgeon performing the procedure are often treated as two different coverage benefits.

Inpatient vs Outpatient: What is the Difference? 

So how do inpatient and outpatient care differ, and why is this important to patients? As we mentioned, outpatient vs. inpatient care is determined by whether a doctor writes an order to admit patients formally into their hospital. If he writes the order, and patients get admitted, then the medical service will be considered inpatient. This in turn has a large impact on how much you as a health insurance policyholder wind up paying after receiving your medical services. In terms of the cost difference, inpatient care tends to be more expensive than outpatient services, as we will explain below. 

In most cases, the doctor's decision between inpatient and outpatient care comes down to how involved the medical service you require will be. People who are admitted as inpatients to hospitals and facilities will typically have more serious conditions that require prolonged monitoring and care from medical staff overnight or for more days. As a result, the costs for inpatient care tend to be significantly higher; the patient and insurance policyholder are hypothetically using up more resources including beds at the facility and time and service provided by other medical professionals on staff, and thoses costs get passed along to both the insurance company and the policyholder.

Oftentimes, the actual patient won't have the ability or option to pick between getting his care administered on an inpatient or an outpatient basis, and the type of care he receives (and ultimately, the cost) will be completely based upon how serious the hospital team thinks the medical condition or operation is. There are some exceptions where patients have more freedom in electing whether their care is conducted inside or outside of a hospital, and that's primarily with rehabilitation services (covered below). Some surgical procedures may also allow you the option to choose between an inpatient vs. outpatient options. This tends to happen more rarely, but certain types of specialized operations on knees, for example, can be handled inpatient or outpatient. While the options may not be exactly the same, when looking at the potential choices, patients should consider the additional costs of overnight facility stays as well as the added time commitment. 

Inpatient and Outpatient Rehab

One area of care where consumers can choose the type of care they receive is in rehabilitation. This can apply to physical therapy as well as care that pertains to drug recovery. Inpatient admissions of this sort are not exclusive to hospitals but can include physical rehabilitation facilities that specialize in this process. The summary of benefits and coverage for insurance plans have a separate section to deal with the cost sharing involved with rehabilitation services, and many break out different copays and coinsurance when it comes to inpatient vs outpatient rehab. Again, for plans with copays, insurance carriers can opt to charge copays both on a per admission/stay basis or on a per day basis. Consumers reviewing their health benefits should be aware of the differences since it could have a significant impact on their wallets.

Outpatient rehab tends to have much cheaper copays since these are akin to office visits that last a shorter period of time. Copays and coinsurance for outpatient rehab are similar to those that you would find for a visit to a primary care physician or a specialist, generally in the neighborhood of $10-$50 per visit depending on your plan. In contrast, inpatient rehab costs can vary quite widely depending on the facility and health insurance plan individual insureds choose.

How much does inpatient care cost?

To give you an idea of how expensive inpatient care can be, here is an analysis of inpatient expenses per day at hospitals in states across the country. 

 Location  Government Hospitals   Non-Profit Hospitals   For-Profit Hospitals 
 United States   $1,831  $2,214  $1,747
 Alabama   1,493  1,400  1,253
 Alaska   1,521  2,369  2,809
 Arizona   1,730  2,462  2,002
 Arkansas   1,382  1,688  1,407
 California   2,767  3,275  2,084
 Colorado   1,950  2,493  2,522
 Connecticut   3,146  2,369  2,363
 Delaware   N/A   2,675  3,510
 District of Columbia   759  2,926  2,006
 Florida   2,132  2,178  1,551
 Georgia   922  1,756  1,462
 Hawaii   1,166  2,320  N/A 
 Idaho   1,154  2,842  2,004
 Illinois   2,006  2,218  1,544
 Indiana   1,776  2,359  2,115
 Iowa   1,327  1,419  1,806
 Kansas   1,064  1,654  1,852
 Kentucky   1,647  1,722  1,542
 Louisiana   1,667  1,680  1,668
 Maine   1,523  2,170  787
 Maryland   N/A   2,495  2,062
 Massachusetts   1,788  2,741  1,768
 Michigan   1,218  2,147  2,482
 Minnesota   1,033  2,179  2,657
 Mississippi   1,176  1,423  1,789
 Missouri   1,400  2,104  1,730
 Montana   507  1,332  3,173
 Nebraska   676  1,886  1,334
 Nevada   2,304  2,143  1,715
 New Hampshire   N/A   2,296  2,024
 New Jersey   1,964  2,464  1,381
 New Mexico   2,681  2,082  1,926
 New York   1,878  2,082  N/A 
 North Carolina   1,969  1,862  1,527
 North Dakota   N/A   1,514  1,767
 Ohio   2,327  2,395  2,285
 Oklahoma   1,304  1,844  1,791
 Oregon   2,725  3,199  2,761
 Pennsylvania   747  2,142  1,675
 Rhode Island   N/A   2,536  N/A 
 South Carolina   1,936  1,928  1,636
 South Dakota   474  1,132  2,312
 Tennessee   1,352  1,892  1,421
 Texas   2,700  2,222  1,794
 Utah   2,658  2,418  2,198
 Vermont   N/A   1,532  N/A 
 Virginia   2,596  1,734  1,809
 Washington   2,698  3,273  2,310
 West Virginia   728  1,582  1,151
 Wisconsin   344  2,038  2,523
 Wyoming   1,157  1,443  2,200

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