U.S. Hospitals See Encouraging Signs during March

May 03, 2022

After a challenging start to the year, U.S. hospitals saw outpatient volumes and revenues rise during March, but significant challenges remain for the rest of 2022, according to Kaufman Hall’s monthly National Hospital Flash Report.

With expenses easing slightly and a return of outpatient care, U.S. hospitals’ median change in operating margin rose 32.7 percent month-over-month, according to the report released this week.

Despite encouraging signs, actual year-to-date hospital operating margins remained negative for a third consecutive month, and supply chain issues, labor costs, and inflation kept expenses above March 2020 and March 2021 levels.

“Hospitals experienced a resurgence in outpatient care and revenues in March, as many patients sought care they delayed during the Omicron surge,” Erik Swanson, Kaufman Hall’s senior vice president of data and analytics, said in a statement. “Declining COVID-19 case rates also meant hospitals had fewer high-acuity patients.”

Here are four insights from the monthly report:

• Revenue:  Gross operating revenue increased 14 percent from February to March, with outpatient revenue up 16.1 percent and patient days rising 4.3 percent in that time.
• Expenses:  Total expense per adjusted discharge and non-labor expense per adjusted discharge both decreased 9 percent from February, and labor expense per adjusted discharge was down 8.3 percent. Taking a longer view, total hospital expenses were up 10.6 percent from March 2021 and 17.7 percent from March 2020.
• Surgery volumes:  Operating room minutes rose 17.3 percent month-over-month, signaling the return of scheduled procedures following the winter Omicron surge.
• Margins improving, still negative:  Despite improving revenue, the median Kaufman Hall year-to-date Operating Margin Index was -2.43 percent.

“While the road to recovery remains long for many hospitals, these trends indicate some pressures of the pandemic may be lifting,” 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.