Hospital finances stabilize in May

In May, hospitals saw slightly improving operating margins, declining expenses and increases in outpatient visits, according to the National Hospital Flash Report from Kaufman Hall. The median year-to-date opearing margin index was 0.3% for the month, up from 0.1% in March and April. While improving, these levels are still well below pre-pandemic figures.

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The report notes that patients are slowly returning to hospitals, with adjusted discharges per calendar day measures for emergency department visits and operating room minutes each increasing between April and May 2023 and May 2022 to May 2023 respectively.

“Hospitals may no longer be experiencing the post-pandemic effect of pent-up demand for inpatient services, but patients are showing us they are becoming more comfortable with receiving care in this setting,” said Erik Swanson, senior vice president of Data and Analytics with Kaufman Hall, in a statement. “Hospitals can expect a new normal of slowly increasing margins that may never return to pre-pandemic levels without reevaluating how and where care is being delivered.”

Outpatient services are increasingly driving hospital revenue, with net operating revenue per calendar day seeing a 9% gain from May 2022 to the same time this year. Outpatient revenue per calendar day rose 14% over the same time frame, according to the report.

“Now that hospital finances are showing signs of stabilization, it’s an opportune time for executives to reevaluate their longer-term business strategy,” said Swanson. “The continuing shift in patient demand from inpatient to outpatient services is particularly important and will inform business decisions for years to come.”

The report draws on data from more than 1,300 hospitals from Syntellis Performance Solutions.