Competitive alternatives to hospital inpatient care

Reasons for the heightened national interest in alternative health-care delivery systems, competitive forces and hospital-use patterns, and three major alternatives to inpatient hospital care are discussed. The Reagan Administration's policies on health-care incentives reform, the federal emphasis on prospective pricing systems, increased rate-regulation roles for the states, and growing employer concern over the cost of health benefits have all contributed to the increased interest in alternative delivery systems. Demand for inpatient hospital care is declining and will continue to decline. In addition to changes in the financing mechanisms for third-party payers, there are three broad competitive forces reducing the demand for hospital inpatient care. These are the growth and diversification of ambulatory care, the development of aftercare for chronically ill and elderly patients, and the expansion of alternative delivery systems. Ambulatory-care centers, preferred provider organizations, and health maintenance organizations are discussed, and their impact on hospitals, pharmacists, and the health-care system is evaluated. Trends in the development of these alternatives are described. Competition is forcing hospitals and health-care providers to consider options such as aftercare, alternative delivery systems, ambulatory care, and multihospital systems in order to survive in today's health-care system.