Hospitals See Uneven Financial Performance during January

March 08, 2024

The national picture for hospital finances showed signs of recovery during January, but the story was far from uniform, according to the latest Kaufman Hall National Flash Report.

While above pandemic levels, hospital margins dipped slightly month-over-month, the report notes. The snapshot was the last from the health care analyst before the Change Healthcare cyberattack caused industry-wide disruption last month.

“While hospital financials continue to show stabilization across all volume-adjusted metrics, a deeper dive into the data shows that not all organizations are experiencing the same stabilization,” said Erik Swanson, Kaufman Hall’s senior vice president of data and analytics. Swanson will speak about financial stability in health care at HAP’s 2024 Leadership Summit next month.

Among the key takeaways:

• Margins:  The Kaufman Hall monthly operating margin index was 5.1 percent during January, down from 5.5 percent during December.
• Revenue and expenses:  Year-over-year, hospitals saw considerable gains in both inpatient revenue (9%) and outpatient revenue (10%) per calendar day. These gains were partially offset by total expenses increasing (6%), which included rising costs for supplies (11%) and drugs (13%).
• A growing gap:  In a post last month, the financial analyst noted the uneven landscape for hospitals in their post-pandemic recovery.
  • “When you look harder at the Flash Report data, you find that 40 percent of American hospitals continue to lose money from operations into 2024,” Kaufman Hall noted.
• Action steps:  In an era of information overload, hospitals need the infrastructure and policies to manage data and analytics, ensuring they can be “deployed in an economically viable and efficient manner.” Artificial intelligence is likely to play a role in this process, the health care analyst noted.

The National Hospital Flash Report includes data from more than 1,300 hospitals and is available online.