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Physicians are operating at record-high levels of productivity compared to recent years but receiving less pay per unit of work. The median investment/subsidy per provider continues to increase, but the pace is slowing with only a 1% change from Q3 2022 to Q3 2023.

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.

Physician and provider productivity is on the rise as patients increasingly seek care in ambulatory settings. However, increased revenue and productivity in Q2 was not enough to offset rising expenses as the median investment/subsidy per provider still rose 5% year-over-year to $224,243.

Our summer Rating Agency Webinar covers several important topics, including year-to-date rating activity through the first half of 2023 and what it tells us about the state of the industry.

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.

Physician and provider productivity is on the rise as patients continue to reengage and seek out care that was put off during the pandemic.

Hospital finances are beginning to stabilize as razor thin margins become the new normal. The high level of variance that plagued hospital margins over the past three years is beginning to subside among pricing and inflationary pressures affecting expenses.

Hospitals entered 2023 on more stable footing, following the worst financial year since the start of the pandemic. However, they still face a range of persistent challenges, including higher labor expenses, lower patient volumes, and a fundamental shift in where patients access care services.

Last year was the worst financial year for hospitals and health systems since the start of the COVID-19 pandemic, according to the latest data from Kaufman Hall.