Hospital margins still in red halfway through 2022, Kaufman Hall says

Operating margins were up in June compared to May, but expenses remain at historic highs, leaving hospitals and health systems with cumulatively negative margins, according to Kaufman Hall. 

Four things to know: 

1. The median change in operating margin was up 30.8 percent in June over May, but down 49.3 percent from June 2021, according to the report released Aug. 1. 

2. Hospitals are seeing improved volumes and reduced expenses month-over-month, but will likely end up with historically low margins for the remainder of the year, according to the report. 

3. "Decreases in acuity, escalations in outpatient volume and easing costs in June show that hospitals are faring better month-over-month but are nowhere near pre-pandemic levels," the report stated. 

4. Contract labor costs in June were down from May as demand wanes, but rising employee pay and additional labor pressures are keeping overall expenses high, according to the report.  

Access the full report here

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