Hospital Margins Drop for a Second Month as Labor Expenses Climb

U.S. hospitals and health systems were hit with a second consecutive month of margin declines in October as mounting labor expenses continue to weigh down overall hospital performance, as shown in the November issue of Kaufman Hall’s National Hospital Flash Report. The margin declines came even as pressures from treating high levels of serious COVID-19 cases eased in October. And with cases and related hospitalizations on the rise in recent weeks—coupled with the uncertainties of the newly emerging Omicron variant—the future outlook for hospitals remains uncertain.

Month-over-month, hospitals saw:

  • Median change in Operating Margin (without CARES) decline 12.1%
  • Total Labor Expense increase 2.7%
  • Total Non-Labor Expense decrease 1.1%
  • Patient Days decrease 0.5%

Read the November 2021 National Hospital Flash Report

Meet the Author
Erik Swanson

Erik Swanson

Senior Vice President
Erik Swanson is a Senior Vice President with Kaufman Hall’s Data Analytics practice, focusing on Performance Improvement.
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