Health system finance leaders are keeping an eye on the stock market, earnings reports and what the midterm elections could mean for healthcare.
1. Franklin, Tenn.-based Community Health Systems is releasing its third-quarter financial report Oct. 26 after the market closes. The health system reported $326 million net loss in the second quarter and revenue was down 2.4 percent year over year. Admissions also dropped 3.4 percent year over year. CEO Tim Hingtgen said the system was planning to aggressively recruit and retain permanent staff to replace contract labor, achieve incremental expense reductions and leverage centralized resources to improve results.
2. Nearly one-third of the S&P 500 will have earnings reports released this week. Amazon, Apple and Alphabet also plan to release earnings reports in the coming week. The Dow Jones Industrial Average added 214 points to begin the week, coming off of its best three-week stretch since 2020, according to The Wall Street Journal, but the Nasdaq was down 0.4 percent.
3. With the midterm elections two weeks away, congressional races are heating up in several states. The Wall Street Journal projects the Democrats will lose ground in the House, with 177 seats safe or likely safe, compared to 200 safe or likely safe seats for Republicans. The Journal projects a gridlock in the Senate, as both parties have 46 seats considered safe or likely safe. There are 35 contested seats in the Senate, which is currently split 50-50 along party lines.
4. There could be more reports of hospital workforce strategy changes and reductions as health systems continue to reveal third-quarter earnings results. More than 1,100 hospitals reported lower operating margins than in 2021, according to Strata Decision Technology, at 4.6 percent on average, compared to 7.9 percent last year. The report blamed the government rescinding financial support for hospitals sparked by the COVID-19 pandemic. Operating margins are down 5.4 percent this year and labor, supply and drug costs continue to increase. Strata recommended health systems spend more time drilling into labor costs, eliminating non-value-add work, and taking a deep dive into service lines for opportunities to consolidate, especially as systems merge.
5. Hospitals are filling up again with increased cases of COVID-19, the flu and respiratory syncytial virus. The cases of RSV began hitting children's hospitals this summer and have continued to increase, leading to capacity issues at several hospitals. Flu-related hospitalizations have also hit earlier than usual, according to CDC data.