Median hospital margins increased to 5% year to date in May, but long term trends show persistent month over month instability, according to Strata Decision's Monthly Healthcare Industry Financial Benchmarks.
The report is based on data from more than 1,600 U.S.-based hospitals and 135,000 physicians. While average hospital margins were up year to date from 2023 in May, they dropped nearly 1% from April to May, according to the report. Regionally, average hospital operating margins ranged from 0.9% decrease in the Midwest and 1.8% increase in the Northeast / Mid-Atlantic region.
Hospital revenues were strong in May, but not pacing with the double-digit increases in April. Inpatient revenue was up 6.7% year over year on average but 1% month over month. Average outpatient revenue jumped 8% year over year and 2.2% month over month in May. Revenue is trending in the right direction; May was the 13th consecutive month of year over year gross operating revenue increases for inpatient, outpatient and overall revenue.
Total expenses increased 5.7% year over year on average and 1.6% month over month in May. The increase was driven by drug and supply expenses, which increased 8.3% and 8.1% year over year, respectively.
Labor expenses grew more slowly, at 4.4% year over year on average and 2.4% month over month.