Outpatient volumes and revenue for hospitals and health systems showed a robust rebound in March as expenses eased due to fewer extremely sick patients, a new report said.
Consulting firm Kaufman Hall released its latest hospital flash report Monday (PDF) detailing the impact of system finances for the month of March. A key takeaway from the report is that while actual hospital margins were negative for the third month in a row, outpatient revenues had a massive bump.
“While the road to recovery remains long for many hospitals, these trends indicate some pressures of the pandemic may be lifting,” said Erik Swanson, senior vice president of data and analytics with Kaufman Hall, in a statement.
Outpatient volumes have been persistently hit hard by the pandemic as patients have turned to telehealth and avoided going to facilities to avoid contracting the virus.
However, Kaufman’s latest report showed that outpatient revenue was up 16.7% compared to February 2022 and 2.7% when paired against the same period last year. Outpatient revenues also grew by nearly 35% compared to the first month of the pandemic back in 2020.
Overall, patient days rose by 4.3% compared with February and by 1.2% when put against March 2021. Adjusted patient days also increased 12.5% from the previous month and 4.2% year over year, Kaufman reported.
In another bright spot for hospitals, surgery volumes increased as patients came back to the hospital for procedures delayed due to the omicron variant surge.
“Operating room minutes rose 17.3% month-over-month, but were down 0.7% compared to March 2021,” Kaufman said. “Emergency Department visits also increased, rising 16.8% month-over-month and 6.5% [year-over-year].”
As a result of the increase in surgery volumes, inpatient revenue increased 5.4% in March compared to February and 15.8% when compared to the start of the pandemic two years ago.
Kaufman’s report, based on data sampled from more than 900 hospitals monthly, emphasizes, however, that the industry is not out of the woods yet.
“Despite signs of improvement in March, actual year-to-date hospital operating margins were in the red for a third consecutive month, and adjusted expenses remain well above 2021 and 2020 levels as healthcare continues to cope with inflation, supply chain challenges and widespread labor shortages,” the report said.
Hospitals across the country have faced lingering staffing crises throughout the pandemic, particularly among nurses. Systems have faced high rates to hire contract staff to ensure that hospitals retained enough capacity to fight COVID-19 cases.
Several for-profit health systems such as Community Health Systems and Tenet Healthcare have cited high contract labor rates as dragging down their latest earnings. But those systems also say they expect the rates and use of contract labor to decline in the coming months.
Data from March appear to confirm that prediction, although inflation continues to remain a key issue for expenses overall.
Kaufman Hall reported that labor expenses per adjusted discharge were down 8.3% in March compared to February.