Hospital profitability declined in June, analysis finds

Hospital profitability declined in June for the first month this year, according to a recent analysis by strategic and financial consulting firm Kaufman, Hall & Associates.

The analysis — based on June data from more than 600 hospitals — found that operating margins declined 1.88 percent last month compared to May.

Analysts attributed the decline to factors including volume reductions, increased bad debt, charity care and higher expenses.

"Performance in June indicated an inability to flex expenses commensurate with declining volume. This poses a fundamental risk to hospitals and health systems in a competitive healthcare environment," Kaufman Hall wrote.

Overall, hospitals saw a more than 5 percent month-over-month decline in adjusted discharges, patient days and emergency department visits, according to the analysis. Bad debt and charity care increased by 6.7 percent in June compared to May. Analysts said expenses also rose month-over-month by 2 percent due to declines in labor productivity and increases in supply costs.

Read the full analysis here.

 

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