By now, health systems around the country made it clear that April was a financial disaster in terms of lost revenues coupled with crippling supply expenses caused by the COVID-19 pandemic.
But just how bad was it across the industry? Operating margins plummeted 282% compared to the same period last year and were a whopping 326% below budget, according to Kaufman Hall's latest "National Hospital Flash Report."
"April was the worst month ever for hospital finances,” said Jim Blake, managing director, Kaufman Hall in a statement. “Our nation’s hospitals are in a perilous position. They are serving as the frontlines of our battle against this virus, but the pandemic is threatening their fundamental financial viability at a time when we need them most."
Already, hospital margins were down in the month before COVID-19 hit, the consulting firm reported. But the precipitous drop in volumes ravaged' the sector.
Among the Kaufman Hall's latest findings, the consulting firm reported:
- The largest drops were among surgery volumes as elective procedures were delayed or canceled to protect health systems' capacity to take COVID-19 cases. Operating room minutes drop 61% in April compared to the same month a year ago.
Discharges were down 30% in April compared to a year prior while emergency department visits dropped 43% year-over-year.
- Outpatient revenue dropped about 50% in April compared to the same month a year earlier while inpatient revenue dropped 25% this April compared to the same month a year earlier.
- Expenses in April per adjusted discharge rose 59% and labor expense per adjusted discharge was up 63% year-over-year in April, the consulting firm reported. Non-labor expense per adjusted discharge rose 58%.