Waning patient volumes and revenue brought margins down in April.
Hospital patient volumes and revenue saw a brief rebound in March, but fell flat with declining figures in April.
More patients infected with COVID-19 are staying home and others are delaying care to avoid getting sick, according to Erik Swanson, senior vice president of data and analytics at Kaufman Hall. This, along with more expensive care needed for sicker patients, has strained margins. “Hospital volumes continue to remain low relative to historic benchmarks. That trend is likely to continue in the near term as more patients seek care outside of the hospital and increasingly visit urgent care centers, telemedicine and primary care providers, but may abate over a longer time frame,” he told HCB News.
According to the latest National Hospital Flash Report published by Kaufman Hall, patient days fell 5.7% from March and 1.8% from April 2021. When adjusted, stats were 6.5% lower, but up 1.8%, respectively. Adjusted discharges decreased 3.3% and 0.3%.
The median Kaufman Hall year-to-date operating margin index was -3.09% in March, marking the fourth consecutive month of negative margins. Median change was down 38.1% from March and 76% from last year.
Lower volumes led monthly operating, inpatient and outpatient revenues to drop approximately 7%. But YTD comparisons, respectively, were 6.6%, 5.3% and 8.5% higher. Expenses also decreased 4.3% but were still above pre-pandemic levels. Labor shortages and supply chain challenges caused expenses to grow 8.3% from April 2021 and 9.6% YTD compared to the same period in 2021.
Swanson says providers are likely to end the year with “substantially depressed margins” but are curbing rising labor expenses with in-house agencies, data-driven workforce optimization techniques and care delivery model reassessments. “Hospitals are also recalibrating and modifying their supply chains to address rising non-labor expenses. Many are contemplating their strategic growth initiatives and planned facility improvements, and are focusing their efforts on caring for their communities amid a difficult financial outlook for the rest of 2022.”
The National Hospital Flash Report draws on data from more than 900 hospitals.