Hospitals see 8th consecutive month of shrinking volumes

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October marked the eighth consecutive month of shrinking volumes for U.S. hospitals and health systems, according to the latest Kaufman Hall National Hospital Flash Report published Nov. 30. 

In October, hospitals saw margins fall, revenues flatten and expenses rise as COVID-19 cases grew across the U.S. 

In particular, October 2020 operating margins fell 9.2 percent year-over-year without factoring in federal funding. With federal aid, operating margins were down 8.5 percent year over year. 

Gross operating revenue, not including federal aid, remained flat when compared to October 2019 levels. Kaufman Hall said this is a "discouraging sign" after seeing year over year increases in operating revenue for three of the last four months. 

Kaufman Hall attributed the flat operating revenue to a decline in outpatient visits. Outpatient revenue was down 2.6 percent year-over-year.

Additionally, when compared to October 2019, volumes across the board fell. In particular, adjusted discharges fell 9.3 percent, adjusted patient days declined 2.9 percent and operating room minutes fell 5.6 percent when compared to October 2019. Additionally, emergency department visits were down 16 percent in October. 

In addition to falling margins, revenue and volume, hospitals are seeing an uptick in expenses in October. Year over year, total expense per adjusted discharge grew 12.2 percent, labor expense per adjusted discharge grew 10.8 percent and non-labor expenses per adjusted discharge increased 13 percent.

"The coming months will be critical for our nation's hospitals, with the virus expected to continue its rapid spread as families gather for the holidays, and activities move increasingly indoors with the onset of colder weather across much of the country," the Kaufman Hall report reads. 

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