What You Should Know:
– Hospital financial performance has stabilized in 2023 compared to last year, according to the latest National Hospital Flash Report from Kaufman Hall.
– The latest Hospital Flash Report finds the median calendar year-to-date (CYTD) operating margin index for hospitals was 1.1% in August, up from 0.9% in July. Margins are still below historical levels, though positive margins are becoming more frequent in 2023.
Some Relief for Hospitals Amid Inflationary Pressures
Hospital expenses rose in August, but hospitals saw enough increased revenue to offset elevated supply and drug expenses. Labor expenses declined on a volume-adjusted basis, reflecting less contract labor utilization and more overall financial stabilization. Average lengths of stay continued to decline as well in August—down 4% month-over-month—as patients continue to resume more normal patterns of accessing care. August data also show a continued emphasis on care transitioning to the outpatient setting, with outpatient revenue and inpatient revenue per calendar day increasing 12% and 4% respectively on a month-over-month basis.
“This period of relative stabilization is the time for hospitals to re-engage in capital planning efforts,” said Erik Swanson, senior vice president of Data and Analytics at Kaufman Hall. “Hospitals may be feeling reluctant given the last few years, but those that wait may find themselves falling behind their competitors and missing out on key opportunities.”