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U.S. Hospitals Face ‘Very Difficult Start’ to 2022

Recovery from Omicron has uneven start during February

March 29, 2022

U.S. hospitals faced a complex set of challenges following the winter Omicron surge, with operating margins remaining negative for the second consecutive month during February.

Last month, hospitals saw lower inpatient volumes and outpatient care “staggered to recover” following the sharp decline in COVID-19 cases, according to the latest Kaufman Hall National Hospital Flash Report. Expenses, labor shortages, and global supply chain challenges also contributed to the tough start of the year, the report notes.

“2022 is off to a very difficult start for our nation’s hospitals and health systems,” Erik Swanson, Kaufman Hall’s senior vice president of data and analytics, said in a statement. “Margins, revenues, and inpatient volumes declined for most organizations in February, while outpatient care signaled only slow returns.”

Here are four key insights from the monthly snapshot:

  • Margins not sustainable:  The median Kaufman Hall Operating Margin Index for February was -3.45 percent, which is “still well below sustainable levels,” the report notes
  • Revenues:  Month over month, inpatient revenues were down 19.3 percent while outpatient revenues were down 5 percent
  • Expenses:  Following the Omicron surge, hospitals saw total expense per adjusted discharge decline 4.5 percent month over month. Looking at pre-pandemic levels, total expense per adjusted discharge was up 30.7 percent compared to February 2020
  • Length of stay:  The time patients spent in the hospital dropped 5.3 percent from January, but was up 12.6 percent compared to February 2020

“The metrics indicate a challenging recovery from the Omicron surge in the coming months,” Swanson said.

HAP continues to advocate for resources and support to ensure Pennsylvania’s hospitals can continue to provide outstanding care in their communities.

Kaufman Hall’s monthly flash report draws on data from more than 900 hospitals and is available online.