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Hospital financial performance remains strong this year, with continued stabilization in the month of July. Outpatient revenue and average lengths of stay showed signs of improvement.

In a recent Becker’s Healthcare Podcast episode, Ken Kaufman, joined Scott Becker to discuss critical trends in healthcare finance, the impact of COVID-19 on hospital operations, and the challenges of consolidation and staffing in the healthcare industry.

The latest Kaufman Hall National Hospital Flash Report shows that the Calendar Year to Date Operating Margin Index for hospitals was 4.1% in June.

Health systems are confronting a new normal of shrinking revenue and rising labor costs. In the second quarter of 2024, increased labor expenses accounted for 83.9% of total expenses. Additionally, the median investment/subsidy per provider rose 3% since Q2 2023.

Hospital financial performance remained relatively unchanged during the month of May, and the rate of change slowed for margins and other key performance indicators, which reflects stabilization.

Hospital financial performance improved in April relative to both March and the same time frame last year, though a closer examination of the data shows a greater difference in performance at the hospital level.

Ozempic trial shows the drug slows kidney disease progression, a blood-based colorectal cancer test is endorsed for FDA approval, and nursing home trade groups sue over the new staffing mandate.

After peaking in 2021, the average hospital’s registered nurse (RN) turnover and vacancy rates in 2023 have nearly returned to 2019 levels, at 18 percent and 10 percent respectively.

Telehealth company Hims & Hers unveils $199 weight-loss shots, CMS launches an emergency care complaint portal for patients, and the Senate Finance Committee signals interest in Medicare physician payment reforms.

Overall labor expenses and revenue continue to rise, and Q1 2024 data show that labor represented 84% of total expenses. The median investment/subsidy per provider increased 2% compared to Q1 2023.

Margins and volumes declined slightly in March, which may signal more challenges ahead. Hospital outpatient revenue also fell 5%, reflecting the competitive challenges of providing outpatient care.

Hospital financials continue to reflect a strong start to 2024, though the aftermath of the Change Healthcare cyberattack and continued competition from industry disrupters may test financial performance in coming months.