Hospital Margins Drop for a Second Month as Labor Expenses Climb
U.S. hospitals and health systems were hit with a second consecutive month of margin declines in October as mounting labor expenses continue to weigh down overall hospital performance, as shown in the November issue of Kaufman Hall’s National Hospital Flash Report. The margin declines came even as pressures from treating high levels of serious COVID-19 cases eased in October. And with cases and related hospitalizations on the rise in recent weeks—coupled with the uncertainties of the newly emerging Omicron variant—the future outlook for hospitals remains uncertain.
Month-over-month, hospitals saw:
- Median change in Operating Margin (without CARES) decline 12.1%
- Total Labor Expense increase 2.7%
- Total Non-Labor Expense decrease 1.1%
- Patient Days decrease 0.5%
Erik Swanson is a Senior Vice President leading Kaufman Hall’s Data and Analytics Group where he focuses on providing cutting-edge data science tools to our clients to provide deeper and more timely insight, drive operational improvement, develop thought leadership, and produce the most meaningful outcomes.
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