U.S. Hospital Volume, Revenue Decline during July

Hospitals report fewer scheduled procedures, uneven margins

August 28, 2023

With slowing revenue and patient volumes, hospitals faced another challenging financial month during July, according to the latest Kaufman Hall report.

The National Hospital Flash Report, released today, indicated that hospitals are still struggling to return to “normal” after the pandemic and shifting trends in care.

“It’s clear that today’s challenging financial environment is here to stay, and hospital leaders must be proactive in seeking out opportunities to refine their operations and remain competitive,” Erik Swanson, senior vice president of data and analytics, Kaufman Hall, said in a statement. “Collecting good data and feedback is essential for making timely, evidence-based process improvements.”

Here’s what you need to know:

• Declining margins:  Hospital operating margins declined slightly month over month from 1.4 percent to 1.3 percent during July.
• Expenses and revenue:  Both inpatient (-3%) and outpatient (-8%) revenue per calendar day declined during July. With less outpatient care, labor expenses (-1%) and total expenses (-4%) per calendar day also declined, but this was not enough to offset revenue losses.
  • Year to date, total per calendar day expenses also are up (21%) compared to July 2020.
• Care trends:  Average length of stay was up 3 percent month over month, but discharges declined 4 percent per calendar day. Operating room minutes per calendar day also declined 13 percent month over month, signaling fewer scheduled procedures during July.
• Action steps:  The report includes three steps for hospitals, including obtaining necessary insurer approvals before care, collecting data related to length-of-stay and acuity, and strengthening relationships with post-acute care settings.
• Quotable:  “Hospitals that prioritize care transitions are performing better than institutions who do not,” Swanson said. “Identifying steps that can ensure a smooth transition, such as obtaining prompt pre-authorizations and planning discharge early, will help organizations reduce expenses and improve patients’ experience.”

HAP continues to call for support for Pennsylvania’s hospitals to ensure they can deliver outstanding care in their communities. The Kaufman Hall report includes data from 1,300 hospitals on a recurring monthly basis. It is available to review online.