News: Financial gap between low and high performing hospitals grows, report says

This past September, hospitals in the United States continued to face difficult financial headwinds amidst unmoving operating margins, according to a new report from Kaufman Hall.

The new survey compiled data from 1,300 U.S. hospitals. Here are some of the highlights from the report:

• Median operating margins: The median hospital operating margin for the month of September, including all shared services costs, was 2.3%.
• Average operating margins (percentiles): The average margins for hospitals in the 75th percentile and those in the 25th percentile ranged from 14.7% to -1.8%, respectively.
• Patient volume: According to the report, discharges per calendar day were up 1% month-over-month and 4% year-over-year, while emergency department visits per calendar increased 3% month-over-month and 2% year-over-year.
• Expenses: Total expense per calendar day was up 3% month-over-month and 8% year-over-year, with supply expense per adjusted discharge increasing 5% and 7%, respectively. Drug expenses rose 2% and 6%.

“The gap between strong performers versus struggling hospitals continues to widen,” Erik Swanson, managing director and data and analytics group leader with Kaufman Hall, said in a statement with HealthLeaders. “Hospitals need to think about how to manage increased volumes despite flat margins. There will be more demand for emergency departments and inpatient care, and the ability of hospitals to manage patient throughput will be increasingly important.”

Editor’s note: To read the Kaufman report, click here. To read the HealthLeaders coverage, click here.