Economic health of hospitals looks to be improving

Editor's Note

According to a report from the Institute for Supply Management (ISM), economic activity in the hospital subsector grew in June for the 25^th consecutive month, Healthcare Purchasing News July 7 reports.

Following are some observations, according to Nancy LeMaster, MBA, ISM chair for the Hospital Business Survey Committee:

• The Hospital PMI registered 58% in June, a 1.1% increase from the 56.9% increase noted in May.
• The above increase indicates growth for the 25^th consecutive month.
• Most survey respondents reported a continued decline in COVID-19 cases.
• Some reported “strong increases in elective procedures at some facilities and lower volumes at others.”
• Supply chain disruptions continue to be a challenge, “with many panelists commenting on high volumes of product substitutions and challenges getting product from secondary suppliers.”
• Inflation fueled higher prices, fuel surcharges increased, and “high wage rates and supply cost increases continue to put pressure on hospital margins.”

The Hospital PMI® covers ambulatory, inpatient and nursing home-type facilities, and it comprises 10 subindexes in the Non-Manufacturing ISM® Report On Business®, plus four others. Survey Committee respondents are asked to assess their organizations’ performance compared to the previous month—better/higher, same, or worse/lower. The data is converted into diffusion indexes that measure the direction and rate for each measurement. The Hospital PMI was developed in collaboration with the Association for Health Care Resource & Materials Management, an association for the healthcare supply chain profession, and a professional membership group of the American Hospital Association.