1. The Hospital & Healthsystem Association of Pennsylvania© Updated August 2015 Pennsylvania Hospital Perspective, 2004-2014 Ten Year Trend in Inpatient and Outpatient Utilization, Bed Capacity and Closures, and Emergency Department Use in Pennsylvania Licensed Hospitals

2. Pennsylvania Hospital Transformation 2004-2014 Driven by advances in medicine and technology and market pressure for more efficient use of resources, Pennsylvania hospitals and health systems have worked to ensure appropriate utilization of the health care delivery system. During the past 10 years, in Pennsylvania acute care hospitals:  The number of general acute care hospitals has declined 12.8%; and the number of licensed (acute care) beds decreased by 6.9%.  Measures of inpatient utilization have declined: inpatient admissions decreased 12%; inpatient days decreased over 13%; and average lengths of stay decreased by 1.4%.  Outpatient surgeries performed in the hospital setting have decreased by more than 4%, while surgeries performed in freestanding ASCs increased by 87.9%. Source: Pennsylvania Department of Health 2

3. Pennsylvania Hospital Transformation 2004-2014 Use of the emergency department has increased significantly as the number of emergency departments available has decreased. In 2014, Pennsylvania had the first drop in emergency department visits in 10 years. During the past 10 years, in Pennsylvania acute care hospitals:  The number of emergency department visits overall (per 1,000 persons) has increased by nearly 9%.  The number of hospital emergency departments has decreased by nearly 13%. Source: Pennsylvania Department of Health 3

4. Number of Licensed Pennsylvania Hospitals *Includes Children’s Hospitals Source: Pennsylvania Department of Health -12.8% since 2004 +4.7% since 2004 4

5. Reductions in Bed Capacity Pennsylvania Acute Care Hospitals -6.9% since 2004 Source: Pennsylvania Department of Health -3.6% since 2004 5

6. Hospital Beds per 1,000 Population Pennsylvania Acute Care Hospitals Source: Pennsylvania Department of Health -9.6% since 2004 -6.4% since 2004 6

7. Inpatient Admissions Pennsylvania Acute Care Hospitals Source: Pennsylvania Department of Health -12.3% since 2004 -12.3% since 2004 7

8. Inpatient Days Pennsylvania Acute Care Hospitals Source: Pennsylvania Department of Health -13.6% since 2004 -13.6% since 2004 8

9. Inpatient Days per 1,000 Population Pennsylvania Acute Care Hospitals Source: Pennsylvania Department of Health -16.2% since 2004 -16.2% since 2004 9

10. Average Length of Stay Pennsylvania Acute Care Hospitals Source: Pennsylvania Department of Health -1.4% since 2004 -1.4% since 2004 10

11. Occupancy Rate Pennsylvania Acute Care Hospitals Source: Pennsylvania Department of Health -10.9% since 2004 -10.9% since 2004 11

12. Live Births Pennsylvania Acute Care Hospitals Source: Pennsylvania Department of Health -7.0% since 2004 -7.0% since 2004 12

13. Live Births per 1,000 Population Pennsylvania Acute Care Hospitals Source: Pennsylvania Department of Health -9.7% since 2004 -9.7% since 2004 13

14. Outpatient Surgeries Pennsylvania Acute Care Hospitals Source: Pennsylvania Department of Health -4.2% since 2004 -4.2% since 2004 14

15. Growth in Outpatient Surgeries Pennsylvania Hospitals vs. Freestanding Ambulatory Surgery Centers Source: Pennsylvania Department of Health -4.2% since 2004 +87.9% since 2004 15

16. Percent of Revenue from Inpatient Care Pennsylvania Acute Care Hospitals *Percentage reflects the percentage change in the proportion of revenue that is inpatient. Source: AHA Hospital Statistics, 2013 is the most currently available data. -14.9% since 2003 -14.9% since 2003 16

17. In Pennsylvania, Emergency Visits Decreased Over a Stable Number of Emergency Departments Available Source: Pennsylvania Department of Health 17

18. Emergency Visits and Admissions from the ER Source: Pennsylvania Department of Health 18

19. Pennsylvania’s Delivery System  Providers and health care organization leaders are very concerned with financing models around reimbursement and payment for care delivery.  Financial challenges in combination with regulatory compliance and changes to the health and medical workforce create a triple threat for health care organization sustainability. Mergers, acquisitions, and additional alignments/partnerships will likely continue to unfold in the coming years.  The application of population health engagements, proficiency of technologies and delivery system transformations are expected to meet the needs of the rapidly changing healthcare environment. 19

20. The Hospital & Healthsystem Association of Pennsylvania© August 2015 20