Nonprofit hospitals are seeing margins improve as patient demand for care soars, according to Kaufman Hall’s “National Hospital Flash Report” released June 5.
Kaufman Hall, a Vizient company, analyzed data from 1,300 hospitals collected by Strata Decision Technology for its monthly report.
“Hospital performance from January to April outpaced the first four months of 2024, largely driven by patient volume and hospital efficiency,” said Erik Swanson, managing director and group leader, data and analytics, at Kaufman Hall. “Operating room minutes, ED visits and inpatient revenue are trending upward, demonstrating a strong demand for services. A decline in average length of stay indicates that hospitals are triaging, treating, and discharging patients effectively and appropriately.”
Five things to know:
- Median hospital margins increased slightly from March to 3%, which beats the 1.5% average reported last May. Average hospital margins for January to April 2025 were 3.3%, up over the same period last year.
- Operating margin dropped 3% year over year in April, but improved 6% year to date compared to the same period in 2024. Margins have soared 63% since 2022, during the COVID-19 pandemic. Average operating EBITDA margins increased 2% year to date over 2024.
- Discharges per calendar day ticked up 3% year over year and 4% year to date. The average length of stay dropped 3% year over year and 1% year to date compared to 2024. Observation days increased 7% over last month and emergency department visits per calendar day were up 3% year to date.
- Net revenue per calendar day jumped 6% year over year, driven by a 10% increase in outpatient revenue. Inpatient revenue was up 5% in April compared to the same time last year.
- Bad debt and charity care per calendar day increased 5% year over year in April, and is up 8% year to date.
- Expenses per calendar day increased 7% year over year in April, driven by a 9% jump in supply expenses per calendar day. Labor expenses per calendar day were up 6% over April 2024 and drug expenses increased 7%. Purchased services expenses per calendar day increased 8% year over year.
