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Report: Hospitals Face ‘Stubbornly High Expenses,’ Uncertainty during Pandemic

December 03, 2021

Hospitals across the U.S. continue to face significant labor costs and financial uncertainty stemming from the COVID-19 pandemic, according to the latest Kaufman Hall National Hospital Flash Report.

The report, published this week, highlights the ways the pandemic has impacted U.S. hospitals, featuring data from more than 900 facilities across the country.

“Hospitals and health systems nationwide are feeling the pain of stubbornly high expenses,” Erik Swanson, a senior vice president of data and analytics with Kaufman Hall, said in a statement with the report’s release. “Broader economic trends such as U.S. labor shortages are adding to the extreme pressures of the pandemic.”

Among the key takeaways from this report:

  • Margins:  Not including federal COVID-19 funding, the median change in operating margin was down about 12 percent from September to October
  • Impact of Omicron:  Hospital performance could “suffer in the coming months as hospitals face sustained labor increases and the uncertainties of the emerging Omicron variant,” the report notes
  • Rising labor costs:  Total labor expenses rose 2.7 percent from September to October. Labor expenses are up 9.3 percent year-to-date and 11 percent compared to year-to-date 2019 figures. Non-labor expenses declined month-over-month
  • Acuity metrics:  For the first time in months, U.S. hospitals saw decreases in patient days (0.5%)  average length of stay (1.5%) during October

“Hospitals face greater uncertainties in the coming months as a result, as COVID-19 cases and hospitalizations appear to once again be on the upswing before many have even had a chance to recover from the last surge,” Swanson said.

HAP will continue to advocate for resources and support to ensure Pennsylvania’s hospitals can provide outstanding care in the communities they serve.

The Kaufman Hall report is available online.