Health Insurance

Inpatient vs. Outpatient Care and Coverage

Inpatient vs. Outpatient Care and Coverage

Inpatient and outpatient care refer to the way you receive a health care service, and it will affect you as a patient and as an insurance policyholder.

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The type of care you receive will depend on how involved your treatment needs to be and the additional resources that may be required to deliver it.

What is inpatient care?

Inpatient care generally refers to any medical service that requires admission into a hospital. Inpatient care tends to be directed toward more serious ailments and trauma that require one or more days of overnight stay at a hospital. Health insurance plans require you to be formally admitted into a hospital for a stay for a service to be considered inpatient.

If you're in the emergency room, for example, and you're asked to stay overnight for medical observation, it does not make you an inpatient. A doctor has to write a note to give the order to admit you.

More than half of all inpatient hospital admissions come through the emergency room department. Health insurance plans break out emergency room versus 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 costs related to the surgeon or 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 range from a few hundred dollars per admission up to $1,000. Depending on your policy, you may have to pay coinsurance on top of the copay.

What is outpatient care?

Outpatient care, on the other hand, is a medical service provided that doesn't require a prolonged stay at a facility. This type of service tends to be less expensive because treatments are less involved and don't require a patient's continued presence in a facility. That means the hospital or medical clinic has to use fewer resources.

Outpatient care can include routine services, such as checkups, and more involved services such as surgery — as long as you're allowed to leave the facility on the same day. Many surgical services, rehabilitation treatments and mental health services are available as outpatient care. Health insurance companies group outpatient services by type, such as primary care, specialist care and mental health care.

Your share of costs depend on the type of care you receive. 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 a patient formally into their hospital. If the doctor writes the order and the patient gets admitted, then the medical service will be considered inpatient.

This has a large impact on the cost of medical services because inpatient care tends to be more expensive than outpatient services. In most cases, the doctor's decision between inpatient and outpatient care comes down to the involvement level of the treatment.

People who are admitted as inpatients 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 these costs get passed along to both the insurance company and the policyholder.

Oftentimes, the actual patient won't have the 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 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 rehabilitation

Consumers may be able to choose the type of care they receive with certain services.

For example, physical therapy may be provided inpatient or outpatient. Your health insurance summary of benefits will explain the cost sharing for rehabilitation services, and many break out different copays and coinsurance when it comes to inpatient vs. outpatient rehab.

The insurance carrier can charge copays on a per-admission/per-stay basis or on a per-day basis. If you're reviewing your health benefits, you should be aware of the difference since it could have a significant impact on your wallet.

Rehab services provided in outpatient facilities tend to have much cheaper copays because they're akin to office visits and use fewer resources. For example, you may pay $10 – $50 per visit depending on your plan.

How much does inpatient care cost?

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

Daily inpatient care cost by type of hospital


National average$2,742$3,013


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