Hospital financial performance held steady in February, although hospitals saw a drop in patient demand and utilization, according to Strata.
The firm collected data from 1,600 hospitals to measure financial and operational performance. Here are five observations from the report
Health system operating margins were flat at 1% month over month while individual hospitals reported overall a 1.4 percentage points month-over-month operating margin drop. Compared to February 2024, hospitals reported a 1.4 percentage point increase in operating margins. The median EBITDA margin dropped 1.2 percentage points month over month, according to the report.
The regional year over year operating margin change breakdown is:
South: 2.4 percentage points
Northeast: 2 percentage points
Midwest: 1.2 percentage points
West: -0.5 percentage points
Total expenses dropped nearly 5 percentage points month over month, but were up 4.2 percentage points year over year. Total expenses per adjusted discharge was up 4.6 percentage points year over year. Labor expenses grew 2.2 percentage points over the last year, but were down 7.1 percentage points month over month. Purchased services increased the most year over year, at 8.7 percentage points. Supply expenses were up 6.7 percentage points and drug expenses jumped 5.4 percentage points in the last year.
The regional expense growth breakdown is:
West: 5.5 percentage points
Northeast: 5.3 percentage points
South: 4 percentage points
Midwest: 3.9 percentage points
Hospital revenue has grown for the last 22 months, jumping 5.1 percentage points year over year. Inpatient revenue rocketed 7.4 percentage points over 2024, while outpatient revenue was up 4.4 percentage points. The regional inpatient revenue breakdown is:
Northeast: 9.8 percentage points
Midwest: 8.2 percentage points
South: 6.8 percentage points
West: 6.3 percentage points
Patient volume dropped in February, with inpatient admissions 9.3 percentage points lower than in January. Year over year, inpatient admissions were up 1.5 percentage points, but observation visits were down 4.6 percentage points; emergency visits dropped 6.1 percentage points; and outpatient visits declined 2.7 percentage points.
The service line breakdown is:
Infectious disease: 15.2 percentage points
Nephrology: 7.5 percentage points
ENT: -3.4 percentage points
Neonatology: -2 percentage points
Physician practices reported an 8 percentage point increase in total direct expenses and nearly 4 percentage point increase in physician revenue. However, productivity was up just 1.1 percentage points from February 2024 to February 2025. The median total expense per physician FTE was up around $1.2 million December through February.
