News: 2022 set to be the worst financial year of the pandemic yet for hospitals, report finds
Hospitals and health systems have seen some of the worst margins since the start of the COVID-19 pandemic, according to Kaufman Hall’s recent National Hospital Flash report. This is due to the fact that financial performance on average for hospitals plunged between June and July this year, Healthleaders reported. The report cited declining outpatient revenue, expensive inpatient stays, and decreasing operating room time as some of the causes, all while federal support has waned.
"Hospital and health system leaders are currently facing the most challenging year of the COVID-19 pandemic, as related financial hardships are no longer being offset by federal support," said Erik Swanson, a senior vice president of data and analytics with Kaufman Hall. "At the same time, hospital CFOs and other leaders must be able to respond to day-to-day challenges while building more sustainable strategies for their organizations."
The Kaufman Hall report released notable data including the following:
- The median percent change in operating margin in July was -63.9% from June 2022 and -73.6% from July 2021
- Operating room minutes in July fell 10.3% from June 2022
- The average length of stay rose 2% from June 2022 and 3.4% from July 2021 (a sign that hospitals are treating sicker patients, according to the report)
- Outpatient revenue dropped 4.8% from June to July
- Gross operating revenue in July dipped 3.6% from June 2022
Easing the pressure on hospital bottom lines is more important than ever, Swanson explained. He recommended C-suite leaders find effective, data-driven strategies and put them into action if they haven’t yet. Some hospitals are creating float pools and leveraging technicians and nursing aids to rely less on contract labor, while others are working to improve vendor evaluation.