Hospitals’ working margins and affected person volumes dropped barely in March, in line with a brand new report from Kaufman Corridor.
Hospitals’ single-month working margin index closed out March at 3.4% — a small dip from February’s 3.6%. It’s additionally value noting that March ended with a year-to-date working margin index of three.9% — which remains to be considerably increased than the 1.9% index that ended 2023.
Whereas hospitals had been doing comparatively nicely financially through the first quarter of the 12 months, the report’s information may counsel extra monetary challenges forward for hospitals. Proper now, it’s unclear whether or not the current declines in hospitals’ margins and volumes might be short- or long-term, mentioned Erik Swanson, senior vice chairman at Kaufman Corridor.
“Nothing now we have signifies that we should always count on a big drop in volumes, however the subsequent couple of months will assist us perceive these longer-term tendencies extra totally,” he defined.
The report additionally revealed that hospitals’ outpatient income decreased by 5% in March, due primarily to the aggressive outpatient care panorama.
“Many hospitals are pivoting to supply extra outpatient care choices within the wake of shifts of quantity. Nevertheless, they’re typically discovering themselves competing for sufferers with an growing variety of peer organizations, retailers and different nontraditional suppliers,” Swanson famous.
He additionally highlighted hospitals’ ongoing will increase in incurred dangerous debt and charity, in addition to elevated days in accounts receivable, as further monetary challenges.
In his view, among the improve in accounts receivable balances is because of the Change Healthcare cyberattack, as organizations are extending the time interval by which they are going to accumulate. However rising dangerous debt may additionally be a symptom of bigger tendencies, similar to shifting payer combine away from industrial payers, Swanson added.
To offset declining income and quantity tendencies, the report advisable that hospitals think about boosting their development in high-performing areas like ambulatory surgical procedure facilities, pharmacies and imaging companies. Relying on the hospital, it may additionally be a good suggestion to determine a retail presence, Swanson famous.
Photograph: claudenakagawa, Getty Photographs
