April Hospital Volume, Revenue, and Margin Gains Draw Stark Contrast to Early Pandemic Losses

Hospital margins, volumes, and revenues were up across most performance metrics both year-to-date (YTD) and year-over-year (YOY), but were down compared to March, according to the latest issue of Kaufman Hall’s National Hospital Flash Report. While any signs of progress are encouraging, the April results draw a clear contrast to the severity of record-low performance seen the first two months of the pandemic in 2020, rather than strong overall performance so far this year.

Operating Margin, for example, rose 101.9% or 8.6 percentage points compared to January-April 2020, not including federal Coronavirus Aid, Relief, and Economic Security (CARES) Act funding. With the funding, Operating Margin was up 90.6% YTD or 6.9 percentage points. Operating Margin was up 113.1% (39.3 percentage points) without CARES and 109.5% (21.4 percentage points) with CARES compared to the first full month of the pandemic in April 2020—when nationwide shutdowns and broad restrictions on outpatient procedures caused Operating Margins to plummet 282% (30.3 percentage points) YOY.

April 2021 hospital margins, however, remained relatively thin. The median Kaufman Hall hospital Operating Margin Index was 2.4% for the month, not including CARES. Even with the funding, it was 3.3%.

“We have to keep the April results in appropriate context,” said Erik Swanson, a senior vice president of Data and Analytics at Kaufman Hall. “March and April 2020 were absolutely unprecedented months for our nation’s hospitals and health systems, as they focused their attention on treating patients impacted by the first wave of the pandemic. While anticipate the data in the months ahead will show additional gains over low levels seen in early 2020, overall margins remain low and fluctuations month-over-month convey continued uncertainties for hospitals, as they work to recover from a profoundly challenging pandemic.”

Hospitals nationwide saw April volumes increase across most metrics compared to 2020 levels, but decrease slightly compared to March. Adjusted Discharges were up 5.9% YTD and jumped 66.4% YOY, while Adjusted Patient Days rose 10% YTD and 64.8% YOY. Both metrics fell 1.0% month-over-month.

Emergency Department (ED) Visits were mixed, falling 7% compared to the first four months of 2020 but rising 57.2% YOY and 5.3% month-over-month. Operating Room Minutes were down 3.6% from March, but increased 26.1% YTD and shot up 189.2% compared to April 2020, when COVID-19 abruptly halted most outpatient procedures.

Revenues followed a similar pattern, with Gross Operating Revenue (not including CARES) up 16.7% YTD and 71.8% YOY, but down 2.5% compared to prior month. Inpatient Revenue rose 10.6% YTD and 37.1% YOY but was down 1.9% month-over-month. Outpatient Revenue rose 20.3% YTD and jumped 114.8% compared to April 2020, but fell 2.0% from March.

Total expenses continued to increase both YTD and YOY, but saw moderate decreases month-over-month. Total Expense was up 6.6% YTD and 13.1% YOY, Total Labor Expense increased 6.1% YTD and 9.4% YOY, and Total Non-Labor Expense rose 7.0% YTD and 16.3% YOY. Compared to March, however, all three metrics were down about 3%. Expense results were mixed when adjusted for the month’s volumes. Total Expense per Adjusted Discharge, for example, increased 2% compared to January-April 2020, but fell 32.3% from April 2020 and 2% from March.

The National Hospital Flash Report draws on data from more than 900 hospitals.

The Physician Flash Report includes national data from Axiom’s Comparative Analytics from Syntellis Performance Solutions, which contains data on nearly 100,000 providers representing more than 100 specialties.

Kaufman Hall experts are available for comment, please contact Tiffanie Thomas at tthomas@MessagePartnersPR.com.