National Hospital Flash Report Results: June 2020

Hospitals and health systems across the country began to see signs of financial improvement in May following two brutal months of poor margin, volume, and revenue performance caused by the coronavirus pandemic.

For most hospitals, margins improved significantly from April to May, but still fell well below 2019 levels and below budgets, according to data from more than 800 hospitals featured in the June issue of Kaufman Hall’s National Hospital Flash Report.

Two factors contributing to margin improvements were federal emergency CARES Act funding and a sizable increase in operating room volumes compared to low levels seen in April, as many hospitals resumed non-urgent procedures. The more than $50 billion in CARES Act funding provided temporary relief, helping to push May’s median hospital Operating Margin to 4%. Without this funding, the median margin would have been –8%.

Adjusted Operating Margin for Hospitals - June 2020
Source: Kaufman Hall

Overall, Operating Margin rose 100% from April to May, but fell 13% year-over-year and 6% below budget. These results follow April’s record-low performance, when Operating Margin plunged 282% compared to the same period last year.

Volumes also increased month-over-month in May, but decreased year-over-year and compared to budget across most measures. Adjusted Discharges were up 30% month-over-month, but down 27% year-over-year and 26% below budget. Operating Room Minutes saw the biggest increase of any volume metric, jumping 92% from April to May.

Revenue results for the month were mixed, with actual revenues continuing to decrease year-over-year, but adjusted revenues showing some year-over-year gains due to low volumes. Total Gross Revenue was down 14% compared to May 2019, but up 29% month-over-month. Outpatient Revenue was down 27% year-over-year, but increased 39% month-over-month. Inpatient Revenue fell 12% year-over-year and rose 19% month-over-month.

Looking at revenues adjusted according to volume levels, Net Patient Service Revenue (NPSR) per Adjusted Discharge was essentially flat month-over-month, but rose 10% year-over-year, while NPSR per Adjusted Patient Day was down 1% month-over-month, but up 5% year-over-year.


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Hospitals also saw actual expenses decline year-over-year in May as many organizations implemented furloughs and other aggressive cost control initiatives. Total Expense decreased 6% year-over-year, but was up about 1% month-over-month. Expenses adjusted for volumes grew significantly, however, with Total Expense, Labor Expense, and Non-Labor Expense per Adjusted Discharge all increasing more than 30% compared to the same period last year, as cost control efforts were unable to keep pace with lost volumes.

Although the May results offer signs of financial recovery, they also serve as a reminder of the long road ahead as hospitals and health systems continue to navigate the clinical and financial impacts of an unpredictable virus. The paths to recovery will vary, depending on factors such as the pace of patients’ return, available resources, fluctuations in coronavirus cases, consumer sentiment, and the availability of additional emergency funding.

Hospital and health system leaders nationwide should continue to monitor performance data closely as they seek to keep pace with rapidly changing circumstances, while looking ahead toward post-COVID success.

For the full report on the financial damages from COVID-19 in May, access the National Hospital Flash Report.

For more information about managing the effects of COVID-19, learn about our COVID Financial Recovery Services, or email