Hospital average operating margins dropped from 3.4% in January to 2.5% in February, but are still above 2024 averages, according to Kaufman Hall’s “National Hospital Flash Report.”
Kaufman Hall, a Vizient company, gathered financial performance data from 1,300 hospitals. The average operating margin dropped 11% month over month, but grew 5% year over year. The average operating EBITDA margin decreased 7% month over month but grew 1% year over year.
Net operating revenue per calendar day increased 8% year over year, driven by an 11% jump in inpatient revenue. Outpatient revenue grew just 8% compared to February 2024.
Expenses were also on the rise, with total expenses also up 8% year over year driven by a 10% growth in supply expenses per calendar day. Drug expenses and non-labor expenses both jumped 9% while labor expenses grew 6% year over year. Purchased services expenses also increased 13% from February 2024.
Patient volume held steady, as discharges per calendar day were up 6% year over year in February. Observation days dropped 9% and the average length of stay was flat compared to the same period last year. Emergency department visits increased 4%.
“In the early months of 2025, volumes remain strong across the board,” said Erik Swanson, managing director and data and analytics group leader of Kaufman Hall. “Emergency visits are rising, which is leading to challenges with ED boarding for many organizations. Data also show that inpatient revenue is growing while outpatient revenue has slowed, which points to the rapid growth in outpatient care in the last few years reaching its peak.”
