Hospitals expected to end 2022 with negative margins

Higher costs due to understaffing and fewer patients are putting a financial strain on the hospital sector, which tends to end the year on a low margin, according to Kaufman Hall data released Wednesday. minus.

In October, operating margins fell 2% from the previous month and down 13% from a year ago, Kaufman Hall detailed in the National Hospitals Flash Report, which collects data from more than 900 hospitals.

Expenses increased 1% between September and October while net revenue increased 2%. Labor costs increased by 3%. The number of discharged patients decreased by 1% and the average length of stay increased by 3% due to staff shortages. The number of visits to the emergency department increased by 3% and minutes in the operating room increased by 2%, contributing to a 2% improvement in total operating revenue. But that benefit may not be sustainable because of the lack of manpower.

The report highlighted several bright spots for hospitals, such as a drop in the cost of supplies and medicines last month.

This year, health systems like General mental health, Eternal KaiserAscension, Cleveland Clinic and Providence experienced losses in excess of $1 billion in recent quarters. High labor and supply costs, investment loss and low refund account for these financial struggles to varying degrees across health systems.

Hospitals will likely have to deal with economic challenges exacerbated by the pandemic for at least a few years. Some health systems are pursuing mergers and acquisitions expand their outpatient service offering and strengthen employee retention strategy as ways to strengthen their finances.

Erik Swanson, Kaufman Hall’s senior vice president of data and analytics, said in a press release that escalating costs leave hospitals in a precarious financial position over the next year.

“With the health care labor market remaining highly competitive, hospitals are feeling the financial pressure to attract and retain workers with significantly increased wages,” said Swanson. “Every aspect of patient care—from admission, treatment, to discharge—is impacted by labor shortages and as we enter virus season and potential new waves of COVID-19 , pressure on hospitals and their staff could increase.”


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