Hospital operating margins down 96% compared to last year, Kaufman Hall finds

Without federal relief aid, hospital operating margins have fallen 96 percent in the first seven months of 2020, compared to the same period last year, according to a new Kaufman Hall report.

However, even including funding from the Coronavirus Aid, Relief, and Economic Security Act, hospital operating margins still are down 28 percent from January to July. 

"COVID-19 has created a highly volatile operating environment for our nation's hospitals and health systems," said Jim Blake, managing director, Kaufman Hall. "Hospitals have shown some incremental signs of potential financial recovery in recent months. Unfortunately, there is no guarantee these trends will continue, and hospitals still have a long way to go to recover from devastating losses in the early months of the pandemic."

From January through July, hospital emergency department volumes have fallen the sharpest, declining 17 percent compared to the same period in 2019. Surgery volumes also remain down about 15 percent through July of this year, compared to the same seven-month period in 2019.  

Hospitals also continued to see higher per-patient expenses through the first seven months of 2020, compared to 2019. For example, total expense per adjusted discharge has climbed 16 percent through July and labor expense per adjusted discharge is up 18 percent through July, compared to last year.

Access the full report here

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