News: Hospital margins improved in November but remained negative overall for 2022, report states

In their National Hospital Flash Report published in December 2022, Kaufman Hall released data showing median hospital margins improved in November 2022 but remained negative overall for the end of the year. Meanwhile, hospital expenses declined in November, driving improved margins despite the average patient length of stay and other key volume metrics declining slightly and leading to relatively flat revenue.

The report uses data from more than 900 hospitals on a recurring monthly basis, representative of all hospitals in the United States both geographically and by bed size. As in other industries, significant increases in the cost of labor made it harder for hospitals to see positive margins in 2022. However, hospitals saw labor expenses decrease in November, which the report stated could potentially be due to them relying less on contract labor.

According to the report, hospital outpatient clinics and services have overall shown positive revenue in 2022, buoying margins while inpatient service continues to hamper them. It also analyzed non-operating factors for hospitals, showed minimal rise in things such as the Consumer Price Index and a slowing to coming interest rate hikes. The Personal Consumption Expenditures price index rose only 0.2% in October, for example, “signaling the potential that prices may be stabilizing,” the report stated, “as this was the second smallest increase this year.”

Editor’s note: To access the full Kaufman Hall report, click here.