Positive margin trends for hospitals in new National Hospital Flash report

Editor's Note

The September 2023 National Hospital Flash Report, published by Kaufman Hall on October 2, analyzed data from August 2023 and revealed that while margins are still below historic levels, hospital performance has continued to steadily improve. According to the report: "While hospital operating margins remain below historical levels, overall conditions have stabilized in 2023. The median Kaufman Hall Calendar Year-To-Date Operating Margin Index reflecting actual margins was 1.1% in August."

The findings come from data drawn from 1,300 hospitals nationwide, representative of all hospitals geographically and by bed size. Some highlights include:

• Lengths of patient stays continued to decline, as much as by 5% from July to August and by 8% year over year, depending on the region and number of beds.
• "Patients continue to resume more normal patterns of accessing care," noted the report.
• Expenses increased, including costs of supplies and drugs, but were offset by increased revenue. 
• Labor expenses declined alongside less contract labor utilization, reflecting overall financial stability.
• Regionally, southern hospitals saw the greatest revenue gains both from July to August and year over year. 

The authors of the report advise hospitals to use this positive momentum to revisit strategic capital planning and consider market opportunities and priorities to remain competitive.