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Hospital performance remains stable at the start of 2025. Inpatient revenue grew more quickly than outpatient revenue in January, and the rate of cost growth has slowed considerably.

In the fourth quarter of 2024, the median investment/subsidy per physician was $306,792, an increase of 5% compared to Q4 2023.

In 2024, hospital financial and operational performance stabilized. Outpatient revenue increased, and patient observation days decreased. Though expenses in 2024 rose, they did not outpace inflation on a volume-adjusted basis.

While patient volumes decreased this month, expenses rose. The workforce continues to be competitive as labor expenses rose despite the dip in patient volumes.

This month’s data show general stability, with continued growth in outpatient revenue and expense reductions on a volume-adjusted basis.

Though most indicators were down, hospital performance remained relatively stable overall, according to September data. Both inpatient revenue and average lengths of stay increased.

In the third quarter of this year, the median investment/subsidy per physician was $304,312—rising above $300,000 for the first time. Other expense metrics such as the total direct expense per provider FTE and labor as a percentage of total expenses increased.

Hospital financial performance remained relatively stable during the month of August, and despite higher patient volume, revenue and expenses declined on a volume-adjusted basis.

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.

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.