Hospital Performance Shower Continued Stability in 2024
Hospitals’ financial and operational performance showed continued stability in 2024, with increased outpatient revenue compared to 2023 and fewer patient observation days, the number of days patients spend under hospital monitoring without formal admission. While expenses continued to rise throughout 2024, they did not outpace inflation on a volume-adjusted basis. These are the main findings of the National Hospital Flash Report from Kaufman Hall, a Vizient company.
The report also finds that bad debt and the volume of charity care provided by hospitals in 2024 increased. Experts at Kaufman Hall say this may be due to fewer people being enrolled in public insurance programs like Medicaid as pandemic-era coverage protections expired, as well as increased rates of coverage denials by insurers.
“While it’s encouraging to see continued stability in hospitals’ financial well-being over the past 12 months, historically slim margins indicate hospitals are not yet in a fully sustainable position,” said Erik Swanson, Senior Vice President and Data and Analytics Group Leader with Kaufman Hall. “The uptick in bad debt and levels of uncompensated care provided by hospitals will be an indicator to monitor over the next several months. On the workforce front, we continue to see a competitive and tight labor market across the healthcare sector.”
According to Kaufman Hall’s quarterly Physician Flash Report, physician payment and productivity also rose in the final quarter of 2024. The median subsidy paid by hospitals to practice groups reached $306,792 per employed physician. Experts note that while physician output and productivity rose, reimbursement remains a challenge and an indication that traditional fee-for-service models may not be sustainable.
“This data shows us that, while physician payment is rising, providers are working more while generating less revenue per unit of work,” said Matthew Bates, Managing Director and Physician Enterprise Service Line Leader with Kaufman Hall. “Looking ahead, alternative risk-sharing structures like value-based models have shown promise—particularly in primary care—in increasing revenue without solely relying on greater output from doctors.”
The data comes from Kaufman Hall’s National Hospital Flash Report, which draws on data from more than 1,300 hospitals from Strata Decision Technology, LLC. The Physician Flash Report draws on data based on more than 200,000 providers, also from Strata.
About Kaufman Hall, a Vizient Company
Kaufman Hall, a Vizient company, provides management consulting solutions to help society’s foundational institutions realize sustained success amid changing market conditions. Since 1985, Kaufman Hall has been a trusted advisor to boards and executive management teams, helping them incorporate proven methods, rigorous analytics, and industry-leading solutions into their strategic planning and financial management processes, with a focus on achieving their most challenging goals.
Kaufman Hall services use a rigorous, disciplined, and structured approach that is based on the principles of corporate finance. The breadth and integration of Kaufman Hall advisory services are unparalleled, encompassing strategy; financial and capital planning; performance improvement; treasury and capital markets management; mergers, acquisitions, partnerships, and joint ventures; and real estate.
CONTACT: Toby Howard, (571) 201-7409, THoward@MessagePartnersPR.com