Average nonprofit hospital margins dipped to 3.3% in November, according to Kaufman Hall's "National Hospital Flash Report," released Jan. 9.
The data is based on information gathered from 1,300 hospitals by Strata Decision Technology. Hospital margins hit a 12-month low in November, dropping from 5.8% in October. The year-to-date average margins hovered around 4.6% for most of the year, and remained there despite the monthly drop.
The operating margin decreased 14% month over month and 2% year over year in November. Operating EBITDA margin was also down 2% year over year.
Both net operating revenue and expenses per calendar day for nonprofit hospitals rose 5% year over year. Labor expenses increased 5% while supply expenses per calendar day climbed just 2%. Purchased services increased 9% year over year for the month.
"The data indicate that hospitals and health systems may have better opportunities to plan their expenses," said Erik Swanson, senior vice president and data and analytics group leader with Kaufman Hall. "Using predictive analytics and modeling could help organizations optimize their financial planning process."
Here is the regional breakdown for operating margin performance:
- West: -8% year over year
- Midwest: 7% year over year
- South: Flat
- Northeast / Mid-Atlantic: -15%
- Great Plains: -1%