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Inpatient vs Outpatient: Understanding the difference

Megan Fraser Fact Checked Updated: 25 November 2023
Types of Health Insurance

The difference between inpatient and outpatient services can be confusing to understand, especially when it comes to your private health insurance and Medicare. Whether you’ve recently purchased health insurance or are trying to decide whether it’s worth it, it’s important to understand the difference between being an in patient and an out patient.

We unpack the services offered at in patient and out patient levels. Discover how both are paid for by health insurance, Medicare, or what you should expect to pay for out-of-pocket. It’s generally a good idea to review your health cover periodically to make sure that you’re covered should the worst happen and you need to claim for any specific services.

Key Features

  • The main difference between inpatient and outpatient care is if the patient has been administered by a healthcare professional or not.
  • Typically, you’ll only be able to claim for inpatient services from your insurer.
  • Medicare generally covers most outpatient service costs.
  • Ambulance services are mainly considered an outpatient cost, but certain health insurance policies cover ambulance costs.

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What is outpatient care?

Outpatient care is the opposite of inpatient care, where you visit a doctor or specialist in a hospital but are not admitted. For example, if you visit the emergency room by your choice and have not been formally administered by a professional, you are considered an outpatient. If you are viewed as an outpatient, Medicare can cover a portion of the fees.

The benefits of outpatient care and service include:

What is inpatient care?

An in patient is someone who has been admitted to a hospital for a specific treatment, which is usually booked beforehand. You are also considered an in patient when you need to visit the emergency room in a critical or crisis state. However, it’s important to note that you are not considered an in patient for visiting every doctor or specialist within a hospital. You need to be admitted or booked for admission.

Inpatient benefits include:

  • Emergency room patients admitted to hospital
  • Intensive care unit for dire situations
  • Emergency and vital surgeries, including heart surgery
  • Various cancer treatments
  • Pharmaceuticals purchased within the hospital

What is the difference between inpatient and outpatient care?

The primary in patient and out patient difference is being formally administered or admitted by a professional doctor. For example, if a doctor has seen you and admitted you to the hospital for treatment, you are considered an inpatient. Alternatively, if you decide on your own accord that you need to go to the hospital for treatment, you are considered an outpatient.

inpatient vs outpatient

Does private health insurance cover outpatient services?

Health insurance usually does not cover outpatient services. Medicare can cover a percentage of your outpatient costs, which generally adds up to around 85% coverage. Medicare assists you in paying for services such as GP visits, consolation fees, and X-rays. Other services Medicare may cover include dental, glasses, chiropractors, hearing aids, and natural remedies like acupuncture.

In patient services

Generally, your private health insurance should provide some coverage for inpatient services in a hospital. These services and treatments that your health insurance covers depend entirely on the level of cover and type of policy you have purchased.

However, the in patient services health insurance usually covers includes:

Why can you only claim inpatient treatment?

Typically, you are only able to claim for in patient treatment because Medicare pays a portion of the service. Since Medicare can widely cover outpatient services, health insurance will not add to the coverage. You’ll then need to pay the excess out of your own pocket. In contrast, because Medicare cannot cover inpatient treatments, health insurance will help pay for the necessary procedures.

The Cost of Inpatient and Outpatient Care

Medicare usually covers out patient care. Generally, up to 75 or 85% of the cost can be paid by Medicare, and you will have to cover the rest. The general cost of a doctor’s consultation is $50.00; for x-rays, it can vary between $10.00-$50.00; psychology appointments amount to around $60.00 – $180.00 per hour.

In terms of in patient services, the cost of surgery, while depending on the type of surgery, can be around $2,000. Other services include intensive care unit visits of around $2 670.00 and cancer treatments, which average $33,944.00 the first year of diagnosis.

What about under observation care?

Typically, under observation care is when you are admitted to remain in hospital for a longer period of time until the doctors deem you well and strong enough to leave and return home. It also applies to a patient the doctor is watching over while they decide whether or not the patient needs further assistance. Under observation patients are, therefore, considered outpatients. These costs are generally considered the same as hospital stays and overnight stays, averaging around $5,205 per stay.

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Frequently Asked Questions and Answers

  • Is ambulatory care the same as outpatient care?

    Ambulatory care is considered the same as outpatient care as it is both out of the hospital vicinity and is not a service you are admitted to but rather an emergency service. Therefore, ambulatory care is the same as outpatient care. However, certain health insurers do cover ambulance services.
  • How do in patient and out patient services affect my private health insurance?

    In patient services are services and treatments you are admitted to by another healthcare professional. Medicare does not cover these services and treatments, including hospital stays, specialist consultations, and emergency room visits. Depending on your level of coverage, your health insurance generally covers inpatient services. Outpatient services are services that you attend on your own accord. You are, therefore, not admitted by another healthcare professional. These services include dental care, doctors visits, and going for eye care check-ups. Medicare generally covers all or most of these outpatient services, but these services are not covered by health insurance.
  • What are examples of inpatient services?

    Inpatient services are services from which a healthcare professional or doctor has admitted you. These services and the benefits of inpatient treatment include hospital accommodation, both day and overnight stays, surgery fees and theatre treatment and services, intensive care unit visits, diagnostics, doctor and specialist visits, and pharmaceuticals purchased within the hospital vicinity. Inpatient care can also include rehabilitation services, childbirth and pregnancy services, as well as the monitoring of severe illnesses.
  • What’s the difference between inpatient and outpatient mental health services?

    The primary difference between inpatient and outpatient mental health services is if you have been admitted by a healthcare professional. For example, if your doctor has admitted you to a psychologist in light of your mental health, you are considered an inpatient and will receive benefits for being an inpatient. However, if you decide to visit a psychologist by your own choice and have not been admitted, you are considered an outpatient and health insurance will not cover the service fees.
  • Which is more expensive, inpatient or outpatient?

    Inpatient services are generally covered by private health insurance, depending on your level of coverage and policy type. Outpatient services can be covered by Medicare but may involve more out-of-pocket costs. It depends on how much money you spend on your health insurance per year versus your personal costs on healthcare service if you attend many outpatient services and do not have Extra’s cover. However, generally speaking, outpatient costs are cheaper, making inpatient more expensive.
  • What is the difference between inpatient and outpatient pharmacy?

    Inpatient pharmacies are found within the hospital vicinity. Suppose a doctor or healthcare professional has written you a prescription and authorized you to receive pharmaceuticals from that pharmacy. In that case, you are considered an inpatient and health insurance may cover the costs. However, while they can be found within the hospital property, outpatient pharmacies are generally located off hospital campuses. If you visit a pharmacy on your own accord to purchase pharmaceuticals, you are considered an outpatient and health insurance will not cover these fees.

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