Hospitals experiencing some of the worst margins since beginning of pandemic: Kaufman Hall

Kaufman Hall experts said that 2022 is shaping up to be the worst year financially for U.S. hospitals and health systems since the beginning of the COVID-19 pandemic. 

Hospitals and health systems saw decreases in outpatient revenue and operating room time and increases in inpatient lengths of stay from June to July, according to Kaufman Hall's most recent "National Hospital Flash Report" released Aug. 29. 

"Although hospitals saw gradual improvement in recent months, July reversed any gains hospitals saw this year," the report stated. 

The report stated that hospitals are experiencing some of the worst margins since the start of the pandemic, but "they lack the federal funds to offset the damage."

Hospitals hired more aggressively in July, but labor was still in high demand and prices rose accordingly, according to the report. Sicker patients also stayed in the hospital longer, driving up costs.

The report also stated that an increasing number of patients continue to choose ambulatory centers over hospital settings for surgical procedures, which is a "sign of a larger shift to ambulatory care and new ways of accessing care outside of the hospital." 

Kaufman Hall Senior Vice President of Data and Analytics Erik Swanson said, "2022 has been, and will likely continue to be, a challenging year for hospitals and health systems, but it would not be prudent to focus on short-term solutions at the expense of long-term planning."

"Hospitals and health systems must think strategically and make investments to strengthen performance toward long-term institutional goals despite the day-to-day financial challenges they experience," he said. 

Read the full report here

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