Hospital financials proved strong in January compared to previous years, though margins declined slightly from the previous month.

Following hospitals’ worst financial year since the beginning of the COVID-19 pandemic, 2023 presented a more promising trend for hospitals and health systems with general improvement across operational and financial measures.

The January issue of the Physician Flash Report features the most up-to-date industry trends drawn from the same data physician groups use to track their finances and operations.

Financial distress emerged as a key factor in hospital and health system M&A in 2023, with 28% of announced transactions involving a financially distressed partner. This is almost double the percentage of transactions in which financial distress was cited as a factor in 2022.

Hospital performance in November signals continued stabilization and growth as operating margins improve. The median Kaufman Hall Calendar Year-To-Date Operating Margin Index reflecting actual margins was 2.0% in November.

The latest Kaufman Hall Report includes an inside look at strategies for successful payer-provider partnerships in a rapidly changing macroeconomic climate.

Hospital performance in October reflects continued stabilization with margins above pandemic levels and volumes holding steady. The median Kaufman Hall Calendar Year-To-Date Operating Margin Index reflecting actual margins was 1.2% in October.

Explore the current state of health system growth and performance measurement; progress the industry has made in adopting consumer-centric, relationship-focused metrics; the barriers they face; and the types of decisions and strategies that arise from taking a more consumer-centric approach.

Physicians are operating at record-high levels of productivity compared to recent years but receiving less pay per unit of work. The median investment/subsidy per provider continues to increase, but the pace is slowing with only a 1% change from Q3 2022 to Q3 2023.

While hospitals’ overall performance declined slightly in September compared to the previous month, the median Kaufman Hall Calendar Year-To-Date Operating Margin Index reflecting actual margins was 1.4% in September.

Hospitals and health systems are seeing some signs of stabilization in 2023 following an extremely difficult year in 2022. Workforce-related challenges persist, however, keeping costs high and contributing to issues with patient access to care.

With 18 announced transactions, Q3 2023 continued the momentum in activity we have seen throughout the year. A high percentage of financially distressed organizations in this quarter’s transactions reflected the impact of challenging operational and financial headwinds.