Health

Hospitals’ volumes, margins recovery still lags behind early 2019 numbers, Kaufman Hall says

U.S. hospitals’ volumes and margins are continuing their recovery from the worst days of COVID-19, yet as of May are still underperforming compared to 2019, according to the latest Kaufman Hall report.

Released Monday, the report also notes that hospitals’ total expenses and revenues have increased beyond what the consulting group had seen both before and during the pandemic.

“The data reflect an encouraging trajectory for our nation’s hospitals and health systems, as they continue to recover from the devastation of COVID-19,” Erik Swanson, senior vice president of data and analytics at Kaufman Hall, said in a statement. “We expect to see gains over the lows seen in early 2020, but comparisons to 2019 provide greater insights to how hospitals are faring relative to pre-pandemic performance.”

Kaufman Hall’s median hospital operating margin index hit 2.6% in May without CARES Act funding and 3.5% with the federal relief.

Those represent a 95.2% and 56.6% year-to-date increase compared to the same window during 2020, but a 20.5% and 9% YTD decline when compared to the first five months of 2019, the group wrote.

Patient volumes generally followed a similar trend. Adjusted discharges were up 9% YTD over 2020 but down 7% compared to 2019, while emergency department visits were roughly flat against 2020 but down 16% compared to 2019.

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Kaufman Hall saw stronger volume rebounds among adjusted patient days and operating room minutes. The former is up 14.3% so far in 2021 compared to last year and down just 0.4% for the same time period in 2019. The latter is up 28.3% YTD against 2020 and inched up 0.8% from 2019.

Gross operating revenue increased across the board when compared to 2020 (18.6%) and 2019 (5.9%).

Breaking that down to inpatient revenue revealed 13.1% and 2% increases through the first five months of 2021 compared to 2020 and 2019, as well as impressive outpatient revenue gains of 25.1% and 6.8% that Kaufman Hall said were driven by increasing post-pandemic demand for these services.

Although hospitals’ total expenses dipped by 0.8% month over month, the overall trend is still an increase over prior years—specifically, an 11.2% YTD gain against 2020 and an 8.7% increase compared to 2019.

Those trends shift to a slight improvement from 2020 after adjusting for discharges. According to the report, total expense per adjusted discharge have dipped 1.7% but are still up 16.6% from the first five months of 2019.

Kaufman Hall’s reports incorporate data from more than 900 hospitals. The most recent monthly release and others outline a revival in hospitals’ financials that the group wrote was to be expected as the U.S. economy continues its gradual reopening.

“Recent performance gains provide positive signs of recovery for the nation’s hospitals and health systems, but there still is a ways to go,” the group wrote in its report.

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