Tuesday, February 27, 2024
HomeHealth & FitnessHospital financial results take another hit after months of improvement

Hospital financial results take another hit after months of improvement

2022 will be the worst year in terms of financial performance for U.S. hospitals and health systems, according to the latest National Hospital Rapid Report from Kaufman Hall.

Facilities are now experiencing “some of the worst profit margins” since the onset of COVID-19, the report said. The report showed that hospital earnings reversed in July in recent months.

Specifically, as of July, the median Kaufman Hall Operating Margin Index was -0.98%. The median percent change in operating margin was -63.9% in July compared to June 2022 and -73.6% compared to July 2021.

It’s worth noting that even in good years, pre-pandemic margins Erik Swanson, MPH, MPH, senior vice president of data and analytics at Kaufman Hall, told MedPage Today . Such thin profit margins allow organizations to reinvest.

Now, halfway through 2022, operating margins are in negative territory, down 73% year over year, which is “very, very disturbing,” Swanson said. “This is really serious.”

Outpatient visits “reduced revenue,” while costs began to rise in June, the report noted. Additionally, hospitals “can no longer rely on supplemental federal funding to cushion these mounting losses as they have in previous pandemic years,” the report said. Patients may be scheduled for surgery in an outpatient setting rather than within hospital walls, the report said. Operating room minutes were down 10.3% from June and down 7.7% year over year.

However, the average length of stay was up 2% from June 2022 and 3.4% from July 2021, indicating that hospitals are now treating sicker patients, according to the report.

Additionally, patient days increased by 2.8% from June to July this year, but decreased by 2.6% compared to July 2021. From June to July, emergency department visits increased by 2.6%.

The report further stated that the decrease in volume contributed to the poor performance of revenue last month. Total operating income fell 3.6% from June, while outpatient revenue fell 4.8% over the same period. Inpatient hospital income also fell 0.7% month-on-month and 1.5% lower than July 2021.

Total fees edged down 0.4% in June-July this year, up 7.6% from July 2021, the report said. Inflation and labor shortages have pushed total costs up 9.6% so far this year.

“Despite poor performance, leaders should not ignore long-term capital and strategic planning despite the urgency of day-to-day pressures,” the report states. Swanson told MedPage Today to provide the right amount of coverage at the lowest cost. They could also consider building internal and larger floating employee pools, as well as developing internal staffing agencies or renegotiating contract workers.

Facility leaders in a number of other areas may check to help address current financial pressures including their supply chain management and renegotiating contracts with suppliers, Swanson said. In addition, it is important to consider how patients are moving where they choose to receive care.

  • author['full_name']

    Jennifer Henderson joined MedPage Today in January 2021 as a business and survey writer. She has covered the healthcare industry, life sciences and legal practice in New York City.

  • RELATED ARTICLES

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here

    LAST NEWS

    Featured NEWS