It’s good to periodically take stock of where we stand. That’s true for our personal health, and it’s also true as it concerns the health of the hospital industry as a whole.
Nine months into what researchers at healthcare firm Kaufman Hall call “an extremely challenging year,” American hospitals and health systems are still operating substantially below pre-pandemic levels. While most metrics improved in August as compared to July, September numbers are still somewhat anemic, indicating that healthcare organizations have a way to go before getting back to a firmer footing—especially from a financial standpoint. The following will act to summarize the latest assessment of U.S. hospital health based on a September report published by Kaufman Hall.
Margins
The median year-to-date (YTD) operating margin Index reflecting actual margins was -0.3 percent through August. This highlights the continuing losses that American hospitals have experienced thus far in 2024. While this is disappointing, hospital executives can be somewhat encouraged to know that this may actually point to some slight signs of improvement. This is because operating margins improved by a median of 4.2 percentage points from last month.
So, month to month, we may be heading in the right direction, but the fact is that hospital operating margins remain down by a median of 2.1 percentage points from last year. Similarly, operating EBITDA margins also demonstrated monthly improvement, with a median increase of 3.7 percentage points. Nevertheless, EBITDA margins are still down by 2 percentage points from a year-to-year standpoint.
Volumes
The good news is that outpatient volumes rose in September as it appears that more patients finally determined it was time to undergo those elective procedures they had put off during what some are calling “the COVID surge.” Here is a snapshot of some of the important volume-related data as found in the September report:
Revenues
The Kaufman Hall report indicates that there were volume increases last month. This was largely due to improved outpatient activity, which further contributed to improved revenue performance in August. Here are some of the details:
Expenses
It should come as no surprise that hospital costs continue to rise. Here’s the breakdown from the September report:
So, hospital decisionmakers have some new numbers to chew on. All they can do is look at these national trends, compare them to the situation in their own facilities, and determine a way forward that makes sense from a financial health, as well as a patient health, perspective.