Median health systems margins decreased to 1.9% in August, a fourth straight month of declines, according to Strata Decision Technology's Monthly Healthcare Industry Financial Benchmarks report released in September.
"This is the second consecutive month that we’ve seen operating margins tighten for the nation’s health systems," said Steve Wasson, chief data and intelligence officer at Strata Decision Technology. "As our largest healthcare organizations, these entities already struggle with thin operating margins and feel expense pressures on a magnified scale. While it’s encouraging to see expense increases slow somewhat compared to the concerning spikes in July, they remain on the rise with no signs of stopping."
The average year to date operating margins for health systems narrowed from 2.1% in July while hospitals fared better, with operating margins increased slightly to 4.8%. Year over year, the median hospital margin increased nearly 1 percentage point.
Overall hospital expenses increased 6.2% year over year in August, improving month over month. Gross operating revenue was up 6.1% year over year, with hospitals in the Midwest seeing the biggest increases at 7% year overyear.