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Hospital financials proved strong in January compared to previous years, though margins declined slightly from the previous month.

A deeper dive into the numbers behind the numbers in Kaufman Hall’s National Hospital Flash Report generates a nuanced story, with results that are relevant to setting long-term social health policy agenda and to the strategic management of complex provider organizations.

Following hospitals’ worst financial year since the beginning of the COVID-19 pandemic, 2023 presented a more promising trend for hospitals and health systems with general improvement across operational and financial measures.

Hospital performance in November signals continued stabilization and growth as operating margins improve. The median Kaufman Hall Calendar Year-To-Date Operating Margin Index reflecting actual margins was 2.0% in November.

Hospital performance in October reflects continued stabilization with margins above pandemic levels and volumes holding steady. The median Kaufman Hall Calendar Year-To-Date Operating Margin Index reflecting actual margins was 1.2% in October.

While hospitals’ overall performance declined slightly in September compared to the previous month, the median Kaufman Hall Calendar Year-To-Date Operating Margin Index reflecting actual margins was 1.4% in September.

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.

Hospitals’ financial performance worsened in July as volumes fell, but margins remain improved from 2022. The median Kaufman Hall Calendar Year-To-Date Operating Margin Index reflecting actual margins was 1.3% in July.

Most hospitals underperformed in June as high expenses and economic pressures persist. As margins continue to stabilize on the surface, the gap between high-performing hospitals and those struggling in this new “new normal” is widening.

Hospital finances showed signs of stabilizing in May amid slightly improving operating margins, declining expenses and notable increases in outpatient visits.

Hospital finances broke even in April amid a continuing trend of high expenses and the unwinding of the Medicaid continuous coverage requirement of the COVID-19 public health emergency

Hospital finances improved slightly in March as hospital leaders navigate high expenses and economic pressures. While margins continue to stabilize, they remain below pre-pandemic levels—leaving hospitals in a vulnerable position should a recession or new public health emergency arise.