Hospitals Hit Setbacks on Road to Recovery

CHICAGO, Sept. 25, 2020 /PRNewswire/ -- August was a challenging month for hospitals nationwide as margins declined across the board, reflecting continued volatility in the sixth month of the COVID-19 pandemic, according to the Kaufman Hall September National Hospital Flash Report.

Kaufman Hall is a leading provider of management consulting services, and enterprise performance management and decision support software. (PRNewsfoto/Amendola Communications)

Operating Margin is down 7.9 percentage points since the start of the year compared to the first eight months of 2019, not including federal funding from the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Factoring in the federal aid, Operating Margin is down 2.3 percentage points year-to-date.

In August, Operating Margin fell 18% (1.8 percentage points) year-over-year, 12% (1.2 percentage points) month-over-month, and 8% (0.7 percentage point) below budget without CARES relief. With the federal aid, Operating Margin was down 3% (0.4 percentage point) year-over-year and 28% (2.9 percentage points) month-over-month, but 3% (0.4 percentage point) above budget for the month.

Margin results have consistently fallen below 2019 levels since the start of the pandemic, but the August declines follow three months of moderate month-over-month gains after the most devastating losses in March and April.

"While the August numbers are concerning, they are not surprising," said Jim Blake, managing director, Kaufman Hall. "The latest results clearly illustrate the long road ahead for hospitals as they weather the ups and downs of a difficult recovery."

Multiple factors contributed to the August declines, including continued low volumes and revenues, and high per-patient expenses. Hospitals nationwide saw volumes decline across most measures in August, marking the sixth consecutive month of volumes falling below 2019 performance and below budget.

Adjusted Discharges are down 13% year-to-date, and fell 12% year-over-year and 8% below budget in August. Adjusted Patient Days are down 10% year-to-date, and declined 6% year-over-year and 4% below budget for the month.

Emergency Department (ED) Visits continue to be hit particularly hard, declining 16% year-to-date compared to the same period in 2019. ED Visits saw the greatest year-over-year declines in August, falling 16% compared to both prior year performance and to budget. Operating Room Minutes are down 14% year-to-date and fell 6% year-over-year in August, but were less than 1% below budget expectations.

Hospitals continued to see revenue declines in August. Not including CARES funding, Gross Operating Revenue is down 7% year-to-date compared to the first eight months of 2019. In August, Gross Operating Revenue fell 2% year-over-year and 4% below budget. Fewer outpatient visits have led to revenue declines, with Outpatient Revenue down 10% year-to-date compared to January-August 2019. Inpatient Revenue has fallen 4% over the same period.

Meanwhile, per-patient expenses continue to rise, as hospitals struggle to control costs relative to lower patient volumes. Total Expense per Adjusted Discharge and Labor Expense per Adjusted Discharge both are up 17% year-to-date over the first eight months of 2019. In August, Total Expense per Adjusted Discharge jumped 15% year-over-year and 7% above budget. Labor Expense per Adjusted Discharge increased 14% compared to August 2019 and was 6% above budget. Non-Labor Expense per Adjusted Discharge is up 15% from January-August compared to the same period in 2019, and rose 14% year-over-year and 6% above budget for the month.

The National Hospital Flash Report draws on data from more than 800 hospitals.

Contact Philip Anast at panast@acmarketingpr.com to connect with Kaufman Hall experts for comment.

About Kaufman Hall
Kaufman Hall provides management consulting solutions to help society's foundational institutions realize sustained success amid changing market conditions. Since 1985, Kaufman Hall has been a trusted advisor to boards and executive management teams, helping them incorporate proven methods, rigorous analytics and industry-leading solutions into their strategic planning and financial management processes, with a focus on achieving their most challenging goals.

Kaufman Hall services use a rigorous, disciplined, and structured approach that is based on the principles of corporate finance. The breadth and integration of Kaufman Hall advisory services are unparalleled, encompassing strategy; financial and capital planning; cost transformation; treasury and capital markets management; and mergers, acquisitions, partnerships, and joint ventures.

Press Contact:
Philip Anast
Amendola Communications (for Kaufman Hall)
Email: panast@acmarketingpr.com 
Phone: 312-576-6990

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/hospitals-hit-setbacks-on-road-to-recovery-301138119.html

SOURCE Kaufman Hall

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.