Amid a relatively strong first quarter for the sector, hospitals’ financial performance improved from March to April, per a new Kaufman Hall report.
Margins, outpatient revenue and operating room minutes all increased in April, the report (PDF) found. Meanwhile, average lengths of stay decreased with the return of typical care patterns and the establishment of stronger post-acute care transitions, the report said. The year-to-date operating margin index increased slightly from 3.6% in March to 3.8% in April. The index started off with a high of 4.6% this year after being at 2% in December 2023.
At the same time, emergency department visits have increased and are back to pre-COVID levels, adding pressure on hospitals and health systems. Daily ED visits rose 1% month over month and are up 4% year over year, while daily operating room minutes rose 6% month over month and 10% compared to April 2023. Daily discharges also rose 1% month over month, while daily adjusted discharges rose 2%.
Though margins have improved over the last several years, the report said, growth has slowed in the last few months “and may be settling on a new normal.” And a deeper dive into the data reveals a "greater divide" between high and low performers, per Kaufman Hall's senior vice president of data and analytics Erik Swanson.
"Forty percent of hospitals in the United States are losing money," Swanson said in a statement. "Organizations who have weathered the challenges of the last few years have adopted a wide range of proactive and growth-related strategies, including improving discharge transitions and building a larger outpatient footprint.”
Across the month’s revenue, expense and volume trends, the report indicated an increase in net patient service revenue per adjusted discharge of 1% month over month and 3% year over year. It also found total expense per adjusted discharge declined 3% year over year. Hospitals logged daily net operating revenue of 5% month over month and daily gross operating revenue of 5% from March to April.
Kaufman Hall’s monthly reports incorporate information from more than 1,300 U.S. hospitals, which is collected by Syntellis Performance Solutions (previously Kaufman Hall Software, now part of Strata Decision Technology).
The trend was also apparent throughout earnings calls toward the start of May, when the country’s major for-profit hospital chains like HCA Healthcare and Tenet Healthcare uniformly described increases in their year-over-year revenues and volumes.