Hospital operating margins down nearly 8 percent year over year, Kaufman Hall finds

Excluding funding from the Coronavirus Aid, Relief and Economic Security Act, operating margins for hospitals are down 7.9 percent since the start of 2020 through August, in comparison to the same period in 2019, according to the Kaufman Hall's September National Hospital Flash Report

Seven things to know:

1. Including federal relief aid, hospital operating margins are down 2.3 percent through August, compared the first eight months of 2019.

2. Excluding CARES Act funding, hospitals gross operating revenue is down 7 percent from Jan. 1 to Aug. 31, compared to the first eight months of 2019.

3. For the start of the year through August, adjusted discharges are down 13 percent compared to the same period in 2019, and emergency department visits declined 16 percent compared to the same period in 2019. 

4. Hospital expenses have risen. From Jan. 1 to Aug. 31, the total expense per adjusted discharge and labor expense per adjusted discharge are both up 17 percent compared to the same period in 2019. 

5. In August, operating margins fell 18 percent year over year without CARES Act cash. With the federal aid, operating margins were down 3 percent in August compared to August 2019.

6. August's declines can be attributed to several factors, including low volumes and revenue, coupled with higher per-patient expenses, according to the report. 

7. "While the August numbers are concerning, they are not surprising," said Jim Blake, managing director of Kaufman Hall. "The latest results clearly illustrate the long road ahead for hospitals as they weather the ups and downs of a difficult recovery."

More articles on healthcare finance:
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