Hospitals' finances improve but volume struggles persist: Kaufman Hall

While hospitals became more profitable in 2018, low patient volumes continued to erode performance compared to the year prior, according to a Kaufman Hall analysis.

Kaufman Hall's National Hospital Flash Report examined budget and actual financial data from more than 600 hospitals from the last three years.

Five things to know:

1. Hospitals nationwide saw a roughly 5 percent improvement in their operating margins compared to the year prior.

2. Hospitals also outperformed their budgets by 4.4 percent and saw little to no change in EBITDA margin.

3. At the same time, all volume metrics underperformed relative to the year prior, with even a few indicators showing growing underperformance. For example, discharges continued to decline at a steady rate, while adjusted discharges and adjusted patient days showed a slowing increase. Visits to the emergency room declined at an accelerating rate compared to 2017.

4. In 2018, hospitals saw their bad debt and charity care continue to grow, but at a slower pace toward the end of 2018.

5. While expense indicators performed worse in 2018 than the year prior, Kaufman Hall said, "The changes in expense performance were modest, indicating a bending of the cost curve as more and more hospitals implement cost containment plans."

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